Apr 16, 2008

Government Disregard For Shareholder Rights

The same Editorial looks at Auckland Airport

Unfortunately, the concept has suffered because of the Government's cavalier disregard for shareholder rights in its thwarting of the Canadian Pension Plan Investment Board's bid for 40 per cent of Auckland airport. That, however, need not be a fatal blow. A National government that promoted utility sales and pledged not to indulge in such hamfisted action could restore confidence quickly.

Mr Key has, to some degree, fudged National's intentions by declining to say what would happen during a second National term. He referred only to seeking a mandate from the public for any change of policy. That, again, smacks of safety-first politics.

This was momentarily abandoned following the Government's blocking of the bid for Auckland airport when Mr Key noted, quite appropriately, that future investment in New Zealand and confidence in the sharemarket would be affected. He also said a National government would, on Overseas Investment Office advice, have let the Canadian bid proceed.

That represented a refreshing willingness to stand up for what should happen. For once, Mr Key was not a slave to election-year politics and the notion of sleep-walking to victory. He should be similarly bold about the real merits of asset sales.