Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


PowerCo Takeover Debacle Instructive

PowerCo Takeover Debacle Instructive

Monday 4 Oct 2004

Stephen Franks - Press Releases - Commerce

There is a good lesson to be learned from the Prime PowerCo takeover spectacle, ACT New Zealand Commerce Spokesman Stephen Franks said today.

"Failure can be more instructive than months of high-principled argument. The lesson is to trust the market more, and lawyers and regulators less," Mr Franks said.

"It seems the sellers, or their advisors, failed to see an obvious risk to their expectations. Their request for an exemption then caused another failure, though - to my mind - not a reprehensible one, when the regulator simply failed to tell the vendors and Prime to trust the market.

"The upside of these failures has been reaped by the brokers, and foreign speculators, who are together clipping the ticket of exiting Kiwi investors. Ordinarily, takeovers don't generate much brokerage, but this case has been great for them.

"The efficient, but costly, stampede to a cash exit is the lesson for the takeovers panel: there was no need to craft an exemption for offshore holders. If it had not been granted, and their local laws prohibited their acceptance of the offer's junk bonds, they would have been the sellers to speculating Kiwis. Kiwis would have been clipping foreigners' tickets, instead of the other way around.

"Markets often provide remedies for the failures of lawyers and regulators. Someone usually profits from these hurdles they create. Why not let the market deal with problem caused by silly foreign securities laws in the first place?

"Let's also ensure that our law is not as silly as their's. Let New Zealanders accept foreign offerings freely, if they comply with the foreign law of the offeror," Mr Franks said.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Werewolf: What Does Winston Peters Want His Legacy To Be?

A lot of people in New Zealand seem to resent Winston Peters and the power that he appears to have. “Appears” being the operative word. In reality, Peters will have power only up to the point that he uses it.

By next week, he’ll have become just another junior player in an MMP governing arrangement, battling to hold onto the gains he was promised. More>>


Rising Toll: Road Safety Needs To Be A Higher Priority

Official advice released to the Green Party under the Official Information Act shows that the previous National Government dismissed an option to make road safety its most important transport priority after being told the road toll was rising. More>>


Wellington.Scoop: Arrests At Blockade Of "Weapons Expo"

“We encourage people in Wellington to get down to the Westpac Stadium now for a day of awesome peace action. There will be plenty of food, music and activities to keep us sustained through the day.” More>>


Rorschach Restructuring: PSA Taking Inland Revenue To Court Over Psychometrics

The Public Service Association will be seeing Inland Revenue in Employment Court over its intention to psychometrically test employees reapplying for their roles at the department as part of its controversial Business Transformation restructuring plan. More>>


Nuclear Disarmament: Nobel Peace Prize 2017 Awarded To ICAN

Congratulations from iCAN Aotearoa New Zealand to international iCAN, the other iCAN national campaigns and partner organisations, and the countless organisations and individuals who have worked so hard for a nuclear weapons-free world since 1945. More>>


Expenses: Waikato DHB CEO Resigns

An independent inquiry has identified that Dr Murray had spent more than the agreed $25K allocated for relocation costs, and other unauthorized expenses involving potential financial breaches of the chief executive’s obligations. More>>


Wellington.Scoop: Sad About The Trolley Buses?

The Regional Council’s MetLink is today spending money to tell us that it really loves Wellington’s trolley buses, even though they’re all being taken off our roads by the end of this month. More>>


Post-Election: Preliminary Coalition Talks Begin

New Zealand First will hold post-election preliminary discussions in Wellington with the National Party tomorrow morning and the Labour Party tomorrow afternoon. More>>




Featured InfoPages

Opening the Election