This reeks of kickbacks

Written By: - Date published: 10:17 am, March 6th, 2013 - 40 comments
Categories: assets, privatisation - Tags: ,

Now that the government has ignored the opposition to their ill-fated asset stripping of SOE value, it appears that someone in the government is leaking private information from the sale. Is there a kickback system in operation? Perhaps to help fund the exorbitant upfront costs of sale?

3 news is reporting that:-

Serious questions are being asked about how a sharebroking firm managed to obtain the details of a woman who’d just registered her interest in buying Mighty River Power shares.

The woman, who wants only to be known as Elizabeth, registered on the 0800 number, and within 15 minutes received an email from Milestone Financial Services, asking to represent her.

RadioLIVE business editor Andrew Patterson says alarm bells should be ringing about how the company obtained the investor’s details so it could go phishing for a commission.

“What happens is if you lodge your application through a broker then the Government will effectively pay a commission to the broker for that transaction.”

Business commentator Bernard Hickey says the incident reflects badly on the Government.

“It’s not a good look for the Government or the brokerage because there shouldn’t be someone inside that 0800 number feeding that information on to a broker,” says Mr Hickey.

A spokeswoman for SOE Minister Tony Ryall declined to comment on the issue late last night, and referred inquiries to Treasury.

40 comments on “This reeks of kickbacks”

  1. xtasy 1

    Very, very interesting and “disturbing” news indeed. I have in many cases on various business and economic matters had to agree with Bernard Hickey. His comments on this must be credible criticism. But on the other hand it is not surprising, as there are corruptible staff not only in finance companies, but also in NZ Immigration, and likely a few other departments, who bend the rules.

    Once there are larger sums of money and major rights or benefits involved, temptation is there. Kickbacks, now that makes for good headlines now.

  2. freedom 2

    RadioLive willing to openly criticize the Government,
    up is down and cheddar is blue
    the sky is falling the sky is falling

  3. tc 3

    Key stated that every Kiwi would get 2000 shares didn’t he and the registration process allows you request over 20,000k worth of shares.

    It’s gone anyway under Slippery so lets keep as many as possible in NZ and see just how ‘fair’ it ends up being.

    • freedom 3.1

      unless you work for Mighty River, then you are guaranteed $5000 of shares ? ! ? WTF
      Where are the questions from our media about that deal ?
      What are the terms for that sweet ride?
      What does “NZ based ” really mean,
      Is it just a sidestep of the Kiwis first promise?

      exhale and cry

    • Chris 3.2

      Key promised everyone who applied for up to $2,000 worth of shares (not 2,000 shares) would get the shares they requested. You can request to purchase more (the $20,000 you talk about), but if it is oversubscribed then everyone will get their $2,000 worth (or $1,000 if you have only requested $1,000 etc) and anyone who has requested more will get less than they ask for. However, the people who have indicated their interest early on (i.e. in the next couple of weeks) will not lose as many shares through the reduction because of an oversubscription than those that do not indicate early on.

      Freedom – it is $2,000 and you have to pay for them. The deal as I understand it is that when you purchase the shares you will have to give a commitment that you are a NZ citizen I believe (I haven’t seen any information on what proof if any you will have to give but I imagine you will be required to provide some kind of evidence..

      The deal you are talking about has been in the media – that is where I learnt about it and I haven’t read that much about the whole process.

      • freedom 3.2.1

        Chris , well d’uh really, shares cost money ? wow. now maybe try reading what was written, i was pointing to the deal for Mighty River employees, that nacts have deemed worthy of 2.5 times the stock volume available to you or I.

        It was widely reported that Mighty River staff get a guarantee of up to $5000 of shares. The Herald even had to change their article which originally reported it as 5000 shares gauranteed.

        “He also confirmed that as part of the offer, Mighty River Power employees would be guaranteed a minimum of $5000 worth of shares each in the offer if they wanted them.”
        http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10869016
        http://thestandard.org.nz/kiwis-at-the-front-of-the-queue/#comment-599099

        p.s. for your edification

        Only people who meet the following requirements can “pre-register” to buy shares:
        1. New Zealand citizen
        2. New Zealand bank account
        3. IRD number
        4. New Zealand address

        • Chris 3.2.1.1

          Oh fair enough – I hadn’t heard about that so your original point stands then – where is the media discussion about this.

          To be honest though that part of the scheme doesn’t bother me – while they will not get any kind of overall percentage of the shares more businesses should be getting the employees investing in the company (preferably through share bonus schemes etc).

          • freedom 3.2.1.1.1

            “businesses should be getting the employees investing in the company” something the few companies that have tried it will agree with, but first it takes an owner or owners not suckling for all they are worth at the teat of greed. good luck finding any.

            re the Mighty River bonus to staff, I have had a similar reaction from a few people these last few hours and i guess i simply don’t get why they should receive doubleplusgood share volume over a fellow New Zealander

            • Skinny 3.2.1.1.1.1

              “Oh that will be trader John’s idea probably harks back to the days when he was trading the New Zealand currency.” That wild ride for the NZD that sent manufacturers, farmers, importers etc to the wall. 

               Key will tuck the gullible employees in sometime down the track. Bit like tranzrail shares back in the 80’s Key probably had a hand in that too.

          • alwyn 3.2.1.1.2

            It may sound a bit odd but there is a good economic argument that employees of companies should NOT buy shares in the company, or in fact even in another firm involved in the same line of business.
            The basis of it is that if your employer gets into major problems they are quite likely to be laying off staff and you may therefore lose your job. At the same time of course the share price will have crashed and you won’t be able to sell the shares in order to get money to live on.

            • Richard29 3.2.1.1.2.1

              Indeed. Not to mention that it is very bad practice to buy shares in just one company. It worries me to see reports that for lots of people MRP will be the first time they are buying shares. There are a lot of people who could be sinking an overly large share of their savings into a single company which is dumb.

              Far from having learned anything from the finance company collapses and poor level of financial literacy out there the government seems to be actively encouraging poor investment practice:

              – If you have a mortgage it is a bad idea to buy shares – just pay down your debt.
              – If you are saving on a less than 10 year timeframe (e.g. home deposit) you should not be putting money in shares – they are too volatile in the short term.
              – If you have a small pool of savings (<20k) then is is poor diversification to have 10% of that invested into a single company.

              Basically the only group for whom it is sensible to buy shares are Kiwisaver funds and retired baby boomers in free hold homes who already have a large pool of savings. Which begs the question why the government would be spending millions in foregone revenue from the sale to provide a 'loyalty bonus' to what is already one of the most wealthy and privileged sections of society.

              Oh that's right – it's a National Govt.

        • alwyn 3.2.1.2

          It’s not a major point but you don’t have to supply any of those items at the Pre-register stage.
          They are only required if you later go on to buy some shares.
          Of course if you won’t be able to come up with the citizenship, bank account, IRD and address there isn’t any point in trying to pre-register.

        • xtasy 3.2.1.3

          As far as I understand your group 1 as “NZ citizen” will also include “permanent residents”, i.e. New Zealanders who acquired residence and are resident here, probably for at lest some time (I shall hope).

  4. One Tāne Huna 4

    The appropriate authority to deal with the National Party is the Serious Fraud Office.

    This is the perfect lever for the next government to use to justify annulling the sale.

  5. Rodel 5

    ‘ASSET STRIPPING’ That’s the expresssion I was looking for…brilliant LPRENT!! Should be used in every conversation by every politician who opposes the asset theft.
    As in Brierly’s days perhaps the employees of Mighty River should be very afraid.

    Also…The cartoon in today’s Press (6 March) says it all

  6. hellonearthis 6

    Muldoon had think big
    Key has sell big

    both are painful for new zealand

    • Draco T Bastard 6.1

      At least Think Big supplied us with worthwhile assets that we’re still using and would have available for another few decades at least – if this government weren’t selling them.

      • freedom 6.1.1

        and not only is he stealing from your mokopuna, Key is landing us with bigger debt than Muldoon ever dreamed possible

      • freedom 6.1.2

        and not only is he stealing from our mokopuna, Key is landing us with bigger debt than Muldoon ever dreamed possible

      • aerobubble 6.1.3

        Its the Big Lazy Think. Key time and again ignores consequences, commonsense, an blatantly attacks NZ, to ascribe value to his idea of the moment. We’re not worthy to have kids, to fee them if we have them, to have them taught properly, to house them healthily, and when they live in OZ they can’t even get to university. Its all about the big lazy thinking of Key, a bizarre litany of errors, flob offs, misleads, that sends the media into a coma.

  7. geoff 7

    With Tony Ryall spending so much time on MoH I am not suprised that he has
    neglected his role as the SOE minister.

  8. BLiP 8

    We’ve known for a while that giving personal information to the government while the John Key led National Ltd™ crew is in power is a risky business. Basher Bennett set the tone when dumping on those beneficiaries who dared speak out, now Ryall is flogging off personal data belonging to anyone interested in buying back the assetts they already own. Still, good that we know about this latest malfeasance so early. What’s next . . . ?

  9. BLiP 9

    Heh! Its just a coincidence . . . if you wanna believe a “financial advisor” and a National Ltd™ cabinet minister. I guess the ball’s in “Elizabeth’s” court now: is she an existing client?

  10. tarkwin 10

    The woman, who wants only to be known as Elizabeth???? Mr Patterson clearly leaves no stone unturned when checking the credibility of his source! If this is true someone in a call centre is down the road, I doubt it is endemic or government sponsored. And yes, before anyone asks I have been offered information from call centres that I could use to generate sales leads.

    • freedom 10.1

      just because the reader does not get to know the name does not make the source less credible or imply the journalist did not do their duty.

      granted with the current MSM there is reasonable doubt as to what that duty is . . .

      but i think in this instance the privacy of the individual and the certainty of the event outweighs your need to destroy their life

    • QoT 10.2

      Her privacy had already been invaded once … god only knows why she wasn’t queuing up to get it invaded all over again. 🙄

  11. johnm 11

    Kickbacks in the U$K
    The NHS is being sold of to the privateering vultures, who are going to get their filthy hands on the british peoples’ heritage of decent health care for all” 🙁 🙁 :-(. Keyboy’s after the same here.

  12. Dogberry 12

    At the risk of dampening the hysteria the webpage and 0800 number are merely there to register interest. Anyone wanting to actually proceed to buy shares will need to the sent the prospectus and other documentation, and as the Government itself is not a share broker anyone wanting to proceed will have to work through one as these are the people who deal with the share registry documentation.

    If you already have a share-broker they can act for you. If you haven’t you’ll need to find one – and whoever it is the Government will pay the fees. As it would clearly be most unsatisfactory for the Government to give all this work to one broker excluding the others, in order to be fair the work for unrepresented people will be shared around all brokers and I think it very likely that in this instance Millstone Financial Services were simply ‘allocated’ Elizabeth on her registraton of interest for this reason.

    But hey, conspiracy theories are much more fun.

    • Arfamo 12.1

      It is impossible to dampen hysteria in today’s world. Hysteria keeps everybody warm and malleable.

  13. vto 13

    This is exactly the reason suggested for not trusting the government with census data.

    They simply cannot be trusted. End of story.

  14. vto 14

    Millstone. What a terrible name for a financial services outfit. . . .

  15. arants 15

    Kickbacks?

    Isn’t that implicit in ‘supporting the capital markets’?

  16. Tom Gould 16

    No story here, right? Ryall says no comment, so the chooks shrug their shoulders, say okay boss, and head out for coffee. That’s how it works these days.

    • tc 16.1

      No Comment = Damm don’t ask that. Ryall’s too smart to open his trap and BS like Key and others do.

  17. johnm 17

    Found a really great quote describing the destructive greed for profit and privatisation:

    “The blurring of the line that separates profit from state,” I wrote, “has had a far more devastating effect on American values — indeed, on the very notion that anything besides a good financial buzz even has value — than the blurring of that more famously wobbly line that separates church from state.”

    I fear this isn’t simply about occasional and inevitable corruption, but the righteous, for-profit gaming of a broken social system in the name of a privatized world. The driving force is privatization, and it seizes on divisive, us-vs.-them “ideals” as moral pretexts for intensifying the profitable breakup of the human commons — that which belongs to all of us, such as “human rights” and “justice.“
    ~Robert Koehler”

  18. Richard 18

    This is the dumbest beat-up ever.

    Everyone with a registered share trading account has received emails from their broker about the shares. I received one today as well, from my ASB Securities account. I would imagine that brokers are also emailing non-clients if they can, through any email addresses acquired from advertisers or Flybuys or whatever.

    The brokers are spamming everyone they can in the hope of bagging someone wanting to invest.

    There is literally nothing to see here, and this sort of deranged scaremongering is the very thing that discredits this site.

  19. Drakula 19

    It smells of kickbacks to me and it looks as if Milestone acquired that information illegally or if not illegally it is certainly invasion of privacy.

    Not very ethical is it.

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