Stuff is reporting that The Bank of New York Mellon Corporation has purchased a hundred million shares in Meridian, 8% of the total shareholding.
I guess this was utterly predictable but the news still fills me with rage. As predicted we are watching our wealth producing and strategically vital assets being sold overseas. Stand by as the balance of payments worsens as locally generated wealth flows to overseas corporations.
And if you want to read a scathing denunciation of the asset sale process then this report is it. The report is written by that well know radical the editor of the Dominion Post.
Some highlights:
One wonders what John Key, currency trader, would have made of the rationale of John Key, prime minister, for the failure of Solid Energy, a company valued two years ago at $1.7 billion and now dependent on the goodwill of its bankers to continue trading. If the state coalminer had been partly privatised, it probably would not be in the mess it was now in, Mr Key said yesterday.
One doubts he would have been as sanguine as his later self. More likely he would have advised his clients to have no truck with an outfit overseen with such nonchalance.
Agreed. The real scandal here is that under this Government’s watch Solid Energy has become a cot case business.
One wonders also what John Key, currency trader, would have made of a business that floated a valuable asset during an economic downturn, received a lower return than anticipated, and then, amidst even greater uncertainty, floated an even more valuable asset.
One thing is certain. John Key, currency trader, could have told John Key, prime minister, what the outcome would be – a low price and a low take-up rate from first-time investors.
The Government’s asset sales programme has been an unmitigated disaster – so disastrous it borders on economic vandalism. Valuable assets built up over generations have been hocked off at firesale prices to a handful of investors because Mr Key’s Government could not bear to admit now was not the right time to sell. Arguing that partial private ownership is an improvement on the status quo whatever the price is fatuous.
I could not agree more.
Mr Key’s partial privatisation programme has been driven by political, not economic, imperatives. The price is being paid by everyone.
In the industry in which Mr Key made his fortune, ignorance of the bottom line is a crime for which there is only one price. He will be hoping politics is more forgiving.
This presumes of course that there is an economic justification for the share sale process. Looking at the shambles that is developing I somehow doubt it.
Update: It appears that BMYNC needs a new calculator. Although its original filing with the Stock Exchange used the figure 8.12% it has now filed a subsequent document confirming the figure is 4%. It appears it did not take into account the Government’s shares in calculating its percentage. And the Government thinks that private enterprise is smarter …
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