Origin Forgot OIC Rubberstamp For Contact Takeover
Whoops! Origin Energy Forgot To Get OIC Rubberstamp When It Took Over Contact Energy
One of the biggest deals of 2004 was the $1.7 billion buyout of Edison Mission Energy’s (US) 51% stake in Contact Energy by Origin Energy of Australia.
But CAFCA could find no trace of it in any of the monthly Decisions of the Overseas Investment Commission (OIC, which is now the Overseas Investment Office of Land Information NZ).
So, in July 2005, we wrote and asked for the documentation.
Guess what? They’d forgotten about it and only remembered when they received our inquiry, a year after the event. So, today we got a letter from the OIO thanking us for waking them up and causing them to ask Origin Energy to go through the motions.
“Accordingly, Origin has now sought retrospectively a formal consent for the acquisition of the shares in Contact. The OIC/OIO was satisfied that the failure to obtain a formal consent prior to the settlement of the transaction was purely an administrative oversight and that granting a retrospective formal consent did not raise any policy implications”. That retrospective consent was given in a Decision dated August 18, 2005.
What a farce. We’ve always said that the OIC/OIO’s job could be done by a monkey with a rubber stamp. Obviously the monkey likes to have a lie down now and again and can’t be bothered with the tedium of rubberstamping. I mean, what’s $1.7 billion between friends, it’s only the electricity system after all.
This was under the old Act. It will only be worse under the 2005 Overseas Investment Act which is now in force.
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