Some great work from Labour yesterday as they got the documents showing Bill English in 2009 being advised about Solid Energy’s predicted lower profits from a lower coal price – and asking for a bigger dividend anyway.
English seemed only concerned about getting debt off the central Government books (to make National look good), even if it just meant loading that debt on the SOE.
John Key commented a few weeks ago about how high Solid’s debt was and how commodity companies didn’t usually carry so much debt – but these documents show it was English pushing for and approving that debt, which tripled in the 2 years after 2009 to nearly 42% (debt to equity). They were borrowing $13 million in 2009, but $313 million in 2012 as they were trying to keep up with English’s demands.
English had said today that he did not know coal prices were going to decline, “but documents obtained by Labour show that he did”, Shearer said.
Coal prices were always likely to drop from record highs, particularly as large parts of the world are trying to move away from dirty climate-change-causing fuels, and in the aftermath of the GFC – it made sense, even before the evidence that English received the advice from Solid Energy.
This is more incompetence from English, and more fiddling of the books.
It’ll be interesting to see what Don Elder has to say about this today… (particularly as National have largely hung him out to dry…)