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


Shane Jones Insider Trading Case Speech

Tuesday, 19 June 2007

Urgent Debates: Shane Jones Insider Trading Case Speech

Shane Jones (Labour): It is with a great deal of pleasure that I take this opportunity for a 5-minute call, to be followed by a speaker from New Zealand First. I stand and support Winston Peters in highlighting the issue about two individuals Michael Fay and David Richwhite whom I regard as having done a great deal of damage to New Zealand’s business. Let us just think back to the 1980s and the 1990s, when members of the media and members of the Government in the 1990s enabled Michael Fay and David Richwhite to think that they walked on water.

Let us just focus on how they destroyed our rail transport industry. Not only did they gain access to it but once having got it they asset-stripped itand used their influence through insider trading to fleece.

Not only did they pursue a strategy of having special dividends but they left it as a hovel. They left it hollow, resonating with the name of the book that describes the actions of members of the other side of the House.

But that company was gutted and it took the State then to recapitalise the company, and we can see how important it is proving today to meet our needs, and interests, to transform the economy.

These two men, after having enjoyed the plundering of the public treasury, then decamped overseas. One thing really grates with me when I hear that characters of their ilk have come back to Aotearoa, back to New Zealand, and have spoken and given lectures as to how we need to improve the culture of business, our political culture, when there were no greater corporate vandals, in my view, as when they were at their zenith. They had freedom—carte blanche.

Not only did they punch shareholders when they went in, they robbed them when they went out. They were advising on certain deals, they no doubt had an opportunity to identify where the particularly rich pluckings were. They were able to jump on the other side of the deal, end up owning it, and then pretend they

Parekura Horomia: Then they sold it.

Shane Jones: No, worse, they represented a betrayal of ethical standards that still haunts us today. Why do so many Kiwis have doubts about our capital markets? Why does the current chief executive of the sharemarket still struggle to build people’s confidence? People have not forgotten how these two individuals gorged for their own personal growth. I give full marks to Jane Diplock, who really should go on the Honours List*.

She should become Dame Jane; we should strip Fay of his knighthood and give it to her. At long last someone has identified a long route of wrongdoing. Yes, these people squeaked out of the consequences of the wine box inquiry, but the cork, having been pulled out of this bottle, shows that the sludge of their wrongdoing has not been forgotten by us—not at all.

These individuals actually own an island not very far from *Hauraki—Mercury Island. No doubt it was funded by their affairs driven by their access to the public treasury. But given the vast periods of time they spend overseas, and the shallow level of input they have not only to developing our own economy but to the country’s national pride and well-being, I wonder why our regulators have not looked as to whether they should be allowed to own that island.

Are they actually fulfilling the citizenship requirements. No doubt they fled overseas to avoid tax obligations and to capture the full extent of their *ill-gotten gains, but no way should they be welcome them back in our country until they atone for their wrongdoing. Another thing that certainly bewilders me—but does not surprise me, given the price paid—is the raft of officials of that time, and the professionals, who chose either to defend the perfidy of those individuals or who did not have the courage or, indeed, the resources to pursue them. Somehow we are meant to wipe all this away. No wonder my colleague Lianne Dalziel over here has had to introduce a raft of proposals to improve people’s confidence in the capital markets, the security law, and other frameworks.

Through this out of court settlement, we are given a window through which to peer in order to see how things went wrong, and how badly they went wrong, over that period of time. On occasions, out of this House, when we have spoken about that period of time, one thing irks. It is that the many advisers Fay and Richwhite themselves refused to engage—or refused to defend their transactions on any ethical basis.

We should not forget that these people did not develop the economic resources of our nation. They did not enjoy any larger degree of talent or education. What they had was an insider connection, and that connection was ruthlessly exploited to the distress of minority shareholders. After having amassed well over a billion dollars, what did they do? They fled. How can we have any confidence that they have a place of pride back here in our country? [Interruption] Yes, as my colleague has just said, they fled to a low-tax environment.

The impact of their actions is very negative at a time when we are struggling to introduce pride and enthusiasm so that our people can recover civics, values, and aspiration. This decision is a timely reminder of what we must never do again. These two individuals—admittedly, Richwhite’s name comes up the loudest—have been caught and required to *cough up. They are coughing up only a tiny percentage of what they ought to cough up.

I am led to believe that their penalty is reduced to the period of time that elapsed before the regulator actually seized the moment and moved ahead to secure this decision. But folks we should never ever* forget what this bout of corporate vandalism has done to our reputation in terms of international business. And no one more than I do—I say to Mr Peters—enjoys seeing people of enterprise and business people* having a go, making an honest attempt, and safeguarding themselves and their families.

That is the way our country should be, whether we are Pākehā or Māori. But that we should allow people who perceive themselves to be elitist and who enjoy privilege to prevail over us—the toilers, the families, and those in “Strugglers’ Gully”—and hoodwink us into believing that they hard done by, or plant articles in the media about how aggrieved they feel because the country does not understand them! Oh, we understand them all right!

They exploited every avenue they had available to them not only to destroy confidence but to personally enrich themselves and, no doubt a raft of advisers on the way. But the advisers only got crumbs. They were paid for the quality of their advice.

But the real villains are the organ grinders and not the monkeys. But, you know*, there must come a point in time at which people who elevated themselves as being the architects of a new brand of capitalism, should give an account to the public of the damage wrought by their actions.

Do members know why those individuals are living overseas? In my view, it is because they are afraid of their own shadows—shadows that remind them of what they did to degrade our country in the recent past. And none of it should rest easily on their spirits or consciences. Kia ora tātou.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On Asking The Banks To Be Nicer To Farmers

Few would begrudge the idea that banks should be made to act more humanely – given the obscene profits that the Aussie banks are extracting annually from New Zealand, they can surely afford to cut some slack.

Yet the interesting background statistic is that farm debt in New Zealand has exploded by 270% in the last 20 years, to around $63 billion... More>>


Mosque Attacks: 21 Month Prison Sentence For Sharing Live Stream Video

A Christchurch man who admitted redistributing the livestream video of the mosque killings has been sentenced to 21 months in prison. More>>


Operation Burnham Inquiry: Afghan Villagers Pull Out

The Afghan villagers involved with the inquiry into Operation Burnham say they have lost faith in the process and will no longer take part. More>>


Child 'Uplifts': Children’s Commissioner To Conduct Review

“At the time of the attempted uplift from Hawke’s Bay Maternity Hospital at the beginning of May, our Office shared our views on the critical importance of the mother-child relationship, and the fact that this relationship is denied to too many Māori children”, says the Children’s Commissioner, Judge Andrew Becroft. More>>


Fluro Logo, Definitely Not Racism, Activist Judges: Act Has Conference

“Finally, New Zealanders will have the right to challenge bad laws in court. If the courts find that a law hasn’t been made in accordance with the basic principles of good lawmaking, it can be declared invalid." More>>


Money Found: Revised Offer For Teachers And Principals

PPTA and NZEI have recommended that revised offers from the Government to their members are ratified, Education Minister Chris Hipkins has announced. More>>


Discussion Doc: National's Primary Sector Plans

Today National has released our third discussion document, this one on the primary sector. It showcases our positive and innovative approach to what is the backbone of our economy, Leader of the National Party Simon Bridges says. More>>





InfoPages News Channels