This year, the government made Meridian sell some dams to Genesis, which funded the purchase by borrowing. Meridian then paid a special dividend to the Crown. It made both Genesis and Meridian worth less. A government couldn’t make those kind of reforms if it had to consider private investors’ rights. Pretty simple, eh? Tell that to Hekia Parata.
Hon David Parker: Could steps like the requirement to sell those assets from Meridian Energy to Genesis Energy have been taken if Meridian Energy and Genesis Energy had been in partial private ownership; if so, how would the Government have achieved that?
Hon HEKIA PARATA: That is not the situation we have, and speculating on what might happen under what is proposed does not seem to me to be a reasonable question.
Hon David Parker: Is the Minister then now giving notice to anyone considering buying shares in these companies if they are sold that National might, for market reasons, intervene, with repercussions on the value of shares?
Hon HEKIA PARATA: No.
Hon David Parker: Is the Minister then now admitting that following the privatisation of shares in Meridian Energy and Genesis Energy, the Government’s ability to intervene in the market in order to get better prices is to be constrained?
Hon HEKIA PARATA: No. [Laughter]
National can’t have it both ways. Either potential investors in electricity companies have to know that purchasing shares in these companies comes with the risk that the government will, as it frequently does, use its legislative ability to drastically reform the industry and stuff their share price; or future governments wouldn’t be able to intervene, as National has, in the interests of the public because they would have to consider the rights of private investors and we really will not own our future.
Meanwhile, Bill English thinks that the fact that markets are plummeting worldwide is a good reason to be trying to sell assets on to those markets. Crazy. He also admits that at least 20-30% of what he wants to sell would go overseas.
Finally, Goff smacked the issue of foreign ownership home with English admitting there would be nothing to stop foreign buyers snapping up all the shares after an initial float.