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

 


Key Admits Increased Debt Behind Solid Energy’s Downfall

David
SHEARER

Labour Leader
14 March 2013 MEDIA STATEMENT

Key Admits Increased Debt Behind Solid Energy’s Downfall

John Key must explain why his Government pressured Solid Energy to increase debt when just a few weeks ago he claimed that was the very reason the company is now in dire financial trouble, says Labour Leader David Shearer.

“The Prime Minister has some explaining to do when he returns from South America. He should start by taking responsibility for the role he and his ministers have played in the downfall of the once profitable Solid Energy.

“On the 25th of February, John Key said in a press conference that one of the three major problems contributing to Solid Energy’s financial predicament was that ‘they added gearing to a company that historically had not had gearing’. http://www.scoop.co.nz/stories/HL1302/S00125/pm-press-conference-dominated-by-solid-energy-debacle.htm (15 minutes in)

“But documents obtained by Labour show that it was his own ministers who pressured Solid Energy into increasing its gearing (debt to equity) ratio back in 2009. Research by the Parliamentary Library shows that the net gearing ratio for Solid Energy rose from 13.8% in 2009 to 41.7% last year.

“What’s worse is that Bill English and other ministers were putting that pressure on when they knew that coal prices were tanking. They also continued to milk the company for huge dividends at the same time.

“In Parliament yesterday, Bill English tried to deny knowledge of the coal price problem but a ministerial letter to Solid Energy in May 2009 shows that he knew there was a ‘significant decline in forecast coal prices’.

“John Key and his ministers are trying to cover their own tracks by pointing the finger at the board and CEO. But they’re absolutely in the gun on this issue.

“SOEs Minister Tony Ryall this morning even claimed that the Government didn’t put ‘too much pressure over debt at all’. Yet the letters prove ministers were pushing the company to increase its gearing. And debt did increase from $13 million in 2009 to $313 million three years later. Solid Energy is now $389 million in the red.

“While there are a number of reasons for that decline, John Key and his ministers must take their fair share of the blame,” said David Shearer.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

EPA: Board Of Inquiry Rejects Basin Flyover By Majority Of 3 To 1

The independent Board of Inquiry delegated to decide on the Basin Bridge Proposal has, by a majority decision (3 to 1), cancelled the Transport Agency’s Notice of Requirement and declined its resource consent applications for the construction, operation and maintenance of a flyover on State Highway 1 in Wellington City between Paterson Street and Buckle Street/Taranaki Street...

Parties specified under Section 149Q(3) of the RMA now have 20 working days to make comments on minor or technical aspects of the report. More>>

 

Parliament Today:

Red Tape: Local Regulations Go Under Microscope

The Government says it is accepting nearly all of the recommendations the Productivity Commission has made on ways to improve local regulations. More>>

ALSO:

Spending Questions: Claudette Hauiti To Step Aside At Election

National Party President Peter Goodfellow confirms that he has received notification from List MP Claudette Hauiti that she plans to step aside at the 20 September election. More>>

ALSO:

Gordon Campbell: On The Non-Apology To Tania Billingsley

The refusal by Prime Minister John Key to issue a personal apology to Tania Billingsley has been accompanied by an array of excuses... Yesterday though, Key’s choice of words indicated that an apology was the last thing on his mind. More>>

ALSO:

Conventions: Winston Peters On The Nation

Winston Peters opens door to standing in East Coast Bays electorate, says it's an "exciting point" and he's thinking about it. "I’ve had a whole lot of people writing to me and calling up and saying ‘why don’t you have a go in East Coast Bays’." More>>

ALSO:

Waitangi Tribunal: Report On The MV Rena

In its interim report, the Waitangi Tribunal has found that the Crown’s conduct in response to the grounding of the MV Rena on Otaiti (Astrolabe) reef breached the principles of the Treaty of Waitangi. More>>

ALSO:

Gaza: Wellington Protest For Palestine Calls For End To Bombing

Around 300 people gathered outside the Israeli Embassy in Wellington on Friday to protest Israel’s occupation of Palestine. More>>

ALSO:

Gordon Campbell: On The Failure To Prosecute The GCSB

So one hand of the state – the Independent Police Conduct Authority – has now washed the hands of its brother agencies, and declared that all hands are clean. Case closed. More>>

ALSO:

Illegal Search: Police Behaviour 'Reminiscent Of Tūhoe Raids'

"Māori will lose further trust and confidence in the New Zealand Police and the Independent Police Conduct Authority (IPCA) if the recent incident in Stratford is not adequately addressed. This behaviour would not occur in Epsom or Khandallah so why should police think that such behaviour was acceptable in Stratford," says Chris McKenzie. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news