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


Wellington: Predator Free Capital Plan

Wellington City Council (WCC), the Greater Wellington Regional Council (GWRC) and NEXT Foundation, today announced a joint collaboration to make Wellington the first Predator Free capital city in the world. More>>


Gordon Campbell: On Judith Collins’ Efforts At Self Correction

Thousands of prisoners currently in prison may be entitled to an earlier release than expected – and compensation – because Corrections has incorrectly calculated their term of imprisonment. Unless of course, the government buries its mistakes by changing the law and retro-actively getting itself off the hook… More>>


More Justice & Corrections

Sector Opposes Bill: Local Government Bill Timeframe Extended

The Minister of Local Government Peseta Sam Lotu-Iiga has asked the Select Committee to extend the report back date for the Local Government Act 2002 Amendment Bill (No 2). More>>


Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>


Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>


General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news