- Date published:
8:00 pm, May 7th, 2016 - 14 comments
Categories: brand key, john key, tax - Tags: antipodes trust, hilary barry, john key, ken whitney, mark weldon, matt nippert, mediaworks, nbr, NZX, panama papers, Rachel Glucina, tax havens, The Spinoff
It’s been a shocker week for John Key and his mates
Friend and “lawyer”, Ken Whitney, who isn’t actually a lawyer, was told by Key he was sloppy as the prime minister slithered deeper into the mire over the Panama Papers scandal and the role each has played in maintaining New Zealand’s status as a tax haven.
Key was the only political leader singled out for special attention by Panama Papers whistleblower “John Doe” for his ability to remain “curiously quiet about his country’s role in enabling the financial fraud Mecca that is the Cook Islands”.
But Key and Whitney’s week was positively sunny compared with that experienced by Key cheer leader, former Olympian and markets golden boy, Mark Weldon, who engaged in a trifecta of disasters.
As things got tougher at MediaWorks in the wake of the resignation of star news anchor, Hilary Barry, (whose name Weldon couldn’t get right in the staff memo), he bravely led by example and quit as chief executive, whimpering that the personal cost of continuing was too high. Didums Mark.
It was difficult to escape the stampede of former staffers and associates rushing to dis their former boss – Jeff Hampton, David Farrier, Sarah Hall, Paula Penfold and Mark Jennings all voiced their vitriol and enthused about his departure.
“I did a little yelp of joy…like an excited puppy,” wrote Farrier, the former Newsworthy presenter at TV3, on hearing of Weldon’s resignation.
Check out the best tweets on how unloved Weldon was/is.
Oh, he had one, supporter – gossiper, Rachel Glucina, editor of Scout, the disastrous foray devoted to celeb gossip set up by Weldon.
“The most visionary & inspiring leader I’ve ever had the pleasure to work with has resigned,” tweeted Glucina.
Apart from destroying the well established 3 News brand, Weldon last act was to axe the Four channel and replaced it with Bravo, an all-reality channel. “This was his vision,” lamented Raybon Kan in a scathing critique.
Hayden Donnell and Duncan Greive reported MediaWorks staff had been planning mass insurrection prior to Weldon’s surprise resignation. In a prescient blog in The Spinoff, they noted Weldon’s “brief, tumultuous tenure has already seen the loss of experienced staff, the end of Campbell Live and 3D, concerns over declining TV ratings and ad revenue, along with a steady stream of embarrassing news stories about the organisation.”
Another embarrassment for Weldon this week, that is going to get worse next week when he is in dock as a witness, was the start of a nine-week court battle between stock exchange operator, NZX, and a grain trading business it was buying, when Weldon was CEO of NZX. Each is suing the other for many millions of dollars.
Weldon had forecast the Ralec’s grain-trading platform would become an “agric-Bloomberg”worth A$750 million to $A1 billion (a value that surprisingly never eventuated).
Ralec’s lawyer said in court this week that NZX never gave it the resources to deliver, while NZX alleges Ralec misrepresented its prospects and relationships with the industry.
According to the NZ Herald report, Ralec lawyer Tim North noted there was underperformance in all of NZX’s targeted acquisitions at that point (2010) and Weldon “was under significant pressure from his own board about his own performance”.
“Weldon had been under real concern about the question of NZX’s liquidity,” North said.
The third leg to Weldon’s star-waning trifecta this week, was the announcement he is stepping down as chairman of NZAX-listed internet labour-management company, Geo-Op Limited. Geo-Op listed with great promise in 2013 when the $1 shares first traded at $2.20. They peaked at $4.49 in November of that month, valuing the start-up at over $150 million, but all has since pretty much turned to custard.
In what may be a Weldon pattern, there was a parting of the ways with the female star, Leanne Graham, the former Xero exec who set up the company. To be fair, the shares had already lost 90% of their value from their peak ahead of her departure, but from that point, they have lost another 57% to be down at 28 cents.
Weldon’s step down as chairman, though he remains a director, is part of Geo-Op’s shotgun marriage to Australian mobile sales app developer InterfaceIT. In an usual move for a publically-listed company, reporters were barred from this week’s shareholder meeting to approve the deal, probably because the thin skinned Weldon, couldn’t face them for fear of more personal pain.
On the Whitney front, things got murkier and murkier as Key, Whitney and Revenue Minister Todd McClay contradicted each others’ stories about how Whitney’s specialist foreign trust and tax avoidance company, Antipodes Trust Group, managed to stymie Inland Revenue from tightening up disclosure rules as planned.
Even conservative Granny Herald in its editorial admonished Key for allowing his “lawyer” to approach him over the issue and then advising him to talk to the revenue minister.
“He should not have said anything of that kind. He should have given this message to Ken Whitney: ‘You are my lawyer. I’d rather you didn’t approach anyone in the Government about issues of public policy. Surely somebody else in the industry can do it.’,” NZ Herald wrote.
And that’s accepting Key’s version of events that he did not wig McClay’s ear, which given Key’s past economy with the truth over Dirty Politics etc etc is a big if.
“The Prime Minister needs to keep his personal wealth and investments well away from his public responsibilities. Mr Whitney did his client no favours by bringing this issue to him, even if none of Mr Key’s wealth would be in a foreign trust administered here,” went on NZ Herald.
Interestingly, Key and McClay were at odds over whether Key had informed the Revenue Minister that his personal lawyer would be lobbying him over IRD’s plan.
McClay did not recall Key telling him who Whitney was, but Key, who in the past has had a lot of trouble recalling details, on this occasion was certain he told McClay he would hear from “my lawyer”.
In his bid to extricate himself from a series of conflicting statements, Key then denied Whitney’s claim that the PM had advised him there were no plans to change the status of the foreign trust regime. He said it was Whitney’s “sloppy wording”.
The Herald’s Matt Nippett this week also dug up an interesting story about Whitney that called into question Key’s claim that Whitney was a “highly ethical” lawyer.
The story reported Whitney being castigated by High Court judge, Ed Wylie, for creating a sham trust for a bankrupt property developer then failing to disclose it to authorities probing his client’s insolvency.
Under cross-examination, Whitney disclosed his “high ethics” when asked if he had concerns around setting up structures to allow a bankrupt to continue in business; he told the court: “No, not particularly. It’s a common thing for people to do. It may not be morally as white as it could be but it’s normal practice.”
Well it hasn’t been a great week for ethics, the truth or mateship.
Simon Louisson formerly worked for The Wall Street Journal, NZPA, Reuters, The Jerusalem Post and was most recently a political and media adviser to the Green Party