Air NZ fiasco players
Audrey Young does a roundup on her blog of the main players of the Air New Zealand fiasco.
Young provides a good analysis of why Murdoch concluded there was nothing wrong with Air NZ providing the transport (mainly based on UN Security Council resolutions), but correctly concludes he still should have notified Ministers so it was their decision, not his.
I’m described in the blog post as a “Peters-baiter”. Heh I like that as a title. As I said though it was good to have him avoid the hysterics of Goff. Normally it has been Goff as the calm nuanced one.
There’s one aspect to this, which I am surprised business journalists have not picked up on, and it is whether Dr Cullen has become a deemed Director of Air New Zealand, and could be sued by minority shareholders.
The Companies Act makes it very very clear majority shareholders do not and can not direct the company. Directors have a strict fidicuary duty to run the company in the best interests of the company (hence all shareholders) and not to favour one or more large shareholders.
Now here is a case where the majority shareholder has intervened to force Air New Zealand to give up highly profitable business. This has led to a loss of future profitability for the company and hence a decline in value for minority shareholders.
August 20th, 2007 at 6:38 am
Yes David. Spot on the mark.
August 20th, 2007 at 7:13 am
Does anyone who reads this blog have shares in Air New Zealand? If so, would you be prepared to be the plaintiff in a case against Cullen? It looks like an open and shut case.
August 20th, 2007 at 7:26 am
“Peters -baiter ” , funny haha , what a circus !
August 20th, 2007 at 7:46 am
This is an example of bad policy being made on the hoof with Ministers running around like headless chooks creating problems everywhere. Firstly Goff who has caused a major row with Australia with Air New Zealand being cut out of highly profitable Australian Government business. Then Cullen shafting the minority shareholders in denying the company highly profitable business. In their blind determination to avoid being labeled as war profiteers for the Iraq conflict they have made themselves a bed of nails. This has only become a problem because the Labour Party is trying to create political problems for John Key over Iraq. The lying over officials not telling Ministers awaits a smoking gun memo that reveals Ministers were told. I suspect Winston Peters was told and the Prime Ministers’ department knew. This episode reveals that Mr Goff’s reputation for political competance is rapidly eroding. What is going on I ask.
August 20th, 2007 at 7:57 am
Well, here’s the line from Young’s post I found (surprisingly) most depressing:
Nonetheless, Murdoch made the mistake of substituting his judgment for the Government’s.
Oh… another civil servant who didn’t get the memo that he’s an extension of the Labour Party? Bugger.
August 20th, 2007 at 8:39 am
If there has been a breach of the Companies Act, who is responsible – the majority shareholder demanding it, or directors for acquiescing?
August 20th, 2007 at 8:41 am
I refuse to believe that not one of the senior officials who was aware of this through the Offcials Committee on Security (there are a good number of them on it) did not inform their ministe or at least the ministers office. These officals are cautious, careful people of detail. It just does not wash that they kept it all to themselves., Which one will break ranks?
August 20th, 2007 at 9:21 am
Ben: I believe it would be the directors – but many/most were appointed by Cullen
August 20th, 2007 at 9:43 am
The Directors are liable, but a court can find Dr Cullen has effectively become a “deemed” Director and hold him responsible also.
August 20th, 2007 at 9:51 am
Don’t you have to be round, gold coloured and shiny to bait Peters?
Meanwhile the Australians have solved the problem nicely. They now treat Air NZ like fresh dog turd on a hot day and wont use it for anything other than a model of how politicians will screw with a commerical enterprise for a photo op.
Smooth move by the taylors dummy who’s own department are the ones who didn’t tell him. Well why would they, its not like he takes an interest in doing his job anyway.
August 20th, 2007 at 10:20 am
yet another example of the Socialists appalling lack of understanding of corproate governance. Not surprising given none of them have any commercial experience.
And as for the Directors of ANZ enough said Palmer and crew should have told Cullen and company to go read the Companies Act particularly Sections 130 to 138.
August 20th, 2007 at 10:24 am
Happy to add my widow’s mite to support a court case against Air NZ directors who failed to get the best return for shareholders…….
August 20th, 2007 at 10:47 am
What an utter debacle, I don’t think any from either side of the house come out well from this, National/Labour both clearly put politics before any consideration of the relationship with Australia & acted like warring children.
Labour yet again took out a Government Servant, well I’m sorry they own the Majority of the Airline, there is no excuse for not knowing what was happening, so what if they were not told, if Government policy was to be followed by the Airline, that should have been clearly spelt out & a communication process implemented, blaming Government officials for Labours lack of managerial skill has been repeated way to often.
DPF flys in, bringing up a bizarre law suit, for instance is he now going to sue majority US shareholders of any NZ company which is restricted from trading with Cuba ??, it’s a frivolous & pedantic concept the law suit & worse totally misses the real problem with this whole debacle our strained relationship with Australia.
[DPF: You fail to understand the difference between the Government passing laws which affect all companies in their role as the Government, and the Government as a majority but not sole share-holder, directing the company in a way which disadvantages minority shareholders. ]
August 20th, 2007 at 11:09 am
US Defence News has Phil Goff as its feature guest in it 6 Aug Edition.
One question is
“Q. In the past, Australia has disparaged NZ’s defense effort. What messages are you getting from Canberra now?
Goff. We regard each other as reliable allies in the Pacific. We have both deployed to Afghanistan; we have new capabilities coming on, which they regard as a very useful adjunct to theirs; and they respect the quality of what we do. More than one top military commander in Australia has told me that they love deploying with us because they know they can take for granted that we will be reliable and at least their equals in what we are capable of doing.”
Pity the politicians can’t be as reliable as the troops are.
August 20th, 2007 at 12:44 pm
> I’m described in the blog post as a “Peters-baiter”.
Just as well Winston’s last name isn’t Master.
August 20th, 2007 at 1:12 pm
Government is under the delusion that Companies are run along the same lines as Government.
Out the window with good governance – there’s plenty of people to clean up the mess and bury it.
Welcome to the real world!
August 20th, 2007 at 3:03 pm
Now she has launched into Alexander Downer saying something critical about his private visit to a National Party conference. Downers’ speech was kept private and that has been respected. Perhaps Downer should now release his very good speech.
August 20th, 2007 at 8:18 pm
Audry Young refers to “…… the Air New Zealand fiasco, in which the Govt has only just discovered that the airline it owns – but does not control – has been transporting Australian troops……..”. Is she serious about the lack of control, or simply economically illiterate?
And why does her blog invite comments, then – on the day of publication – tell readers: “Thank you for your interest in commenting on the story Politics : Blog: Main players of the Air New Zealand fiasco. Unfortunately, this forum is now closed for comments.” ?
August 20th, 2007 at 9:32 pm
Cubit9f’s 8.41 a.m. posting is spot on.
There is something very pungent here. Those very senior public servants all have immense intellect, and nobody can convince me that they would ALL have overlooked telling their respective ministers.
But a cynic told me that their salaries are based upon the size of their department and only Labour will go on burgeoning the public service and the ministerial heads’ salaries, so it is in their best interest to take the knocks and keep Liabour in power.
August 20th, 2007 at 9:44 pm
The fall out in the Trans-Tasman relationship is extremely serious. HC is on TV telling Downer to bite his tongue. Usually they play the nationalist card before an election but it seems their current poll slide is propelling them to desperation. Could some one please tell them it looks pathetic.
August 20th, 2007 at 9:53 pm
“US Defence News has Phil Goff as its feature guest in it 6 Aug Edition.
One question is
“Q. In the past, Australia has disparaged NZ’s defense effort. What messages are you getting from Canberra now?”
I guess the answer has changed a bit in the last week. HC’s little hissie fit is for domestic politcal purposes but it is very damaging to NZ – Aust relationships. They won’t forget. God, no sooner is taking them to task over the ANZ flightr and shes in to them over apples.
What have they donbe to us. Oh I forgot, Canberra beat the warriors. Lots of votes amongst the fans.
August 20th, 2007 at 10:08 pm
Did not ANZ approach government officials FIRST, to see if their flights to Kuwait were OK.
August 20th, 2007 at 10:24 pm
Evening Selma,
Reg, Your “pathetic” is quite possibly an understatement – The beltway is actually experiencing mild tremors at present amongst those of us that work in various ministries.
It’s cause is two-fold –
1)The fallout from Setchell-Gate [ our politically neutral independence now removed]
2)The whole maneuvering around repressing genuine electioneering which undermines Govt Ministry job security.
August 20th, 2007 at 10:49 pm
Tauhei
There’s very little relationship between the size of the agency and the pay cheque of senior bureaucrats. Traditionally, Treasury’s Secretary tends to get a big whack and yet that agency is miniscule compared with, say, Police, Corrections or Defence. Size is a factor – but so is the tenure of the individual (newby CE’s get much smaller pay than older heads) – so is the relative “importance” and risk of the Department. There are a whole bunch of factors – of which agency size is one factor of many.
August 20th, 2007 at 11:07 pm
Now she has launched into Alexander Downer saying something critical about his private visit to a National Party conference.
Yes, Tim, and pretty hypocritical considering Clark had no problem with Queensland Premier Peter Beattie spoke on environmental policies at last year’s Labour Party conference; or the then British Deputy PM John Prescott speaking to the same conference in 2001 (along with any number of senior British and Australian Labour figures over the years). I’d also note Clark regularly attends
AFAIK, Downer would have followed the usual protocol of briefing officials in the PM’s office that he’d received the invitation, given some broad indication of the subject matter and carefully avoided any matter that could have been reasonably viewed as unduly partisan. I think someone is counting her electoral chickens before they’re hatched.
August 21st, 2007 at 8:05 am
Clark also stated that Downer should not interfere in NZ politics in the “lead up to an election”. She also went on to point out that she had declined “numerous” invitations to address the ALP (out of respect for Australia’s political system?)
Someone forgot to tell her that Downer is NOT the PM of Australia, quite clearly little Johnny would not have come to NZ to address the Nats.
But then arguing with a woman means that logic and commonsense go out the window very quickly. It’s about time that the media and opposition politicians pick up on those little things and pick at the nits. The sores will open up underneath pretty quickly.
August 21st, 2007 at 2:24 pm
Dead Duck Sux.
Thankyou for your lesson. I like learning from people who know what they are writing about and you seem to know plenty. That is what makes this the best blog on the web.
Please keep up the sensible posts.