14 August 2015

English admits responsibility for Solid failure

Bill English has finally admitted he shares responsibility for the collapse of Solid Energy by encouraging the company to ramp up debt levels but it comes far too late, says Labour’s SOEs spokesperson Clayton Cosgrove.

“On Morning Report Mr English admitted ‘over-ambition’ and ‘high debt levels’ had contributed to Solid Energy’s collapse and that he directed the company to increase debt and pay higher dividends to the Government.

“Mr English said ‘As a shareholder of course you’re responsible’.

“He bizarrely said it was a bad idea to allow SOEs to keep the dividends as they will waste the money, when Solid Energy needed that cash to manage its books.

“He also said: ‘It’s now clear that if you’re running a commodity company, particularly coal you shouldn’t have any debt. That’s clear.’

“Labour has been telling him for three years that it’s international best practice for coal companies to have zero debt so they can handle price fluctuations.

“The fact is Bill English and his SOE ministers were asleep at the wheel. They did nothing and no one paid the price apart from the hundreds of Solid Energy workers who have lost their jobs,” says Clayton Cosgrove.

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