Government At War with Solid Energy Board

Despite having known the scale of Solid Energy’s troubles for years the Government was prepping the company for sale just days before it cut 400 jobs and revealed it was in serious trouble, says Labour’s SOEs spokesperson Clayton Cosgrove.

“National was determined to sell off Solid Energy, come hell or high water. It didn’t matter what the cost. Despite knowing about the serious financial troubles facing Solid Energy they continued to demand the company prepare for sale.

“Astonishingly the Government’s latest ‘document dump’ shows they were still preparing for a float just days before the August 2012 press conference where they announced they were cutting hundreds of jobs.

“The Government let this company get deeper and deeper into trouble. Instead of facing facts and ensuring the company had a long term future they kept trying to put up the for sale sign. There were asleep at the wheel and dreaming of the asset sales dough.

“The Government is now no longer prepping the company for sale, it’s prepping it for the receivers. In February Bill English said there was no way they would let the company fail.

“Yet just two weeks ago Bill English openly questioned Solid Energy’s future. Yesterday John Key said he had seen a KordaMentha report into Solid Energy and started referring to it as a ‘broken company’.

“It’s clear to me that National is preparing Solid Energy for being split up and sold off.

“The Prime Minister says the bankers need to take a haircut so they will lose some of what they’re owed. If they’re taking a haircut it’s the taxpayer that’s been scalped because they’ve been left $389 million in the red and seen 500 jobs lost.

“These documents show a government at war with its own board. National has stuffed up Solid Energy from day one of their asset sales plan.

“Despite numerous warnings - from UBS’s scoping report, from their month-to-month reports and from Treasury - they did nothing. Instead of taking action they merely jawboned.

“National should stop playing politics and start turning the company around. The Government has refused our calls for an inquiry. There must be one now.

“The Government can’t claim that it’s a sound financial manager. They took an export award-winning company and left New Zealanders with financial archaeology. 

“There are 1100 people working for Solid Energy who are hugely concerned about their future. They need some stability,” says Clayton Cosgrove.

ENDS

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