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NZX Asked to Inquire Into Chorus Financial Viability

COALITION FOR FAIR INTERNET PRICING

MEDIA RELEASE

9.00 AM MONDAY 16 SEPTEMBER 2013

NZX Asked to Inquire Into Chorus Financial Viability

The Coalition for Fair Internet Pricing has asked the NZX to inquire into Chorus Ltd following conflicting statements about its financial viability by its chief executive, Mark Ratcliffe, and the prime Minister, John Key.

“We are concerned there may be information circulating in Wellington about the financial viability of Chorus Ltd under the Commerce Commission’s draft determination for the price of copper broadband that is not available to its shareholders or to the broader market,” said the coalition’s spokeswoman, Sue Chetwin, also chief executive of Consumer NZ.

On Thursday, the coalition launched its campaign against the Government’s proposed $600 million copper tax – the economic effect of the Government over-ruling the draft determination, according to a report by top economists Covec.

In response to the campaign launch, Mr Key told TVNZ Breakfast on Friday: “If the Commerce Commission ruling stands there is a chance Chorus will go broke.”

Media were unable on Friday to establish the information on which Mr Key based his comments.

On TV3’s The Nation over the weekend, Mr Ratcliffe would not endorse Mr Key’s comments but said there were “some really challenging scenarios” if the draft Commerce Commission recommendation was accepted.

While denying it had lobbied the government, Mr Ratcliffe said his company had “present[ed] a range of our views” on copper to ministers and officials.

This morning, again on TVNZ Breakfast, Mr Key would not repeat his suggestion Chorus could go broke but said the draft Commerce Commission recommendation would put “pressure” on Chorus.

Ms Chetwin said shareholders and the broader market needed the information on which Mr Key and Mr Ratcliffe were basing their comments to be made publicly available for independent analysis.

“The NZX is the appropriate authority to seek this information in the first instance,” she said.

She noted that Chorus made a net profit of $171 million last year, paid $95 million in dividends to its shareholders and its shares closed only marginally down at $2.88 on Friday.

“This does not look like a company the market thinks has a chance of going broke, or that is facing challenging scenarios, or that might come under financial pressure,” she said.

The Coalition for Fair Internet Pricing was founded by Consumer NZ, InternetNZ, and the Telecommunication Users Association of New Zealand (TUANZ) and is supported by CallPlus and Slingshot, the Federation of Maori Authorities, Greypower, Hautaki Trust, KiwiBlog, KLR Holdings, National Urban Maori Authorities, New Zealand Union of Students’ Associations, Orcon, Rural Women, Te Huarahi Tika Trust and the Unite Union. 

ENDS

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