Clayton Cosgrove
Spokesperson for SOEs

4 October 2013

Time for answers over Solid Energy mess

Solid Energy’s $335 million loss in the last year shows the time has come for real answers on how the company got into this mess which can only come from the Auditor General, says Labour’s SOEs spokesperson Clayton Cosgrove.

“Solid Energy is a complete mess. It took a $335 million hit and earnings were down 78% last year. Meanwhile the company paid $13 million in redundancy to white collar corporate staff and had to write off $150 million in abandoned projects. How on earth did it get this bad?

“The answer is that it has been run into the ground through this Government’s negligence and incompetence.

“It was an export award winning company under Labour, now it’s hanging by a thread. The public need the answers to how that happened.

“When I first wrote to the Auditor-General she left the door open for a full inquiry. I have written to her on two other occasions to provide her with further information. She has made it clear publicly and in writing that she remains open to an inquiry.

“Now that the restructure deal has been effectively finalised and no other inquiry has been conducted, the last port of call for the taxpayer is the Auditor General and I hope she will look favourably on an inquiry.

“It is time for transparency and accountability. We need to know what decisions were made and what action and inaction caused the company’s near collapse. A failure of an SOE of this scale is unprecedented. It happened under this Government’s watch, ministers were well briefed but they chose to do nothing.

“National was warned time and again over four years that Solid Energy was in trouble, but ministers refused to listen and took no action. Their hands-off approach meant they completely ignored the warning signs. Their failure to act allowed the company to be run into the ground.

“The facts show significant amounts of information was provided to ministers. They ignored it. Their prime interest was to take dividends out of the company – the $144 million in dividends paid out over four years is remarkably similar to the $155 million taxpayers have to fork out now.

“Executives received $23 million in bonuses, PR consultants received thousands of dollars and the boss got $250,000 paid out in gardening leave. Who paid the price? The 700 people who lost their jobs. They deserve answers. As does the poor old taxpayer, who is stumping up at least $150 million to fix up the mess,” says Clayton Cosgrove.

ENDS

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