TE URUROA FLAVELL (Māori Party—Waiariki) Link to this
Tēnā koe, Mr Deputy Speaker. Kia ora tātou e te Whare i tēnei ahiahi. It has always been of interest to me that politicians, unfortunately, are rated as the lowlifes in a long list of respected professions. To bring the House up to date today, I can say that, contrary to the speculation raised in the House this morning that carpet sellers, real estate agents, and car salesmen are scraping the barrel, it is actually rather sad that politicians are still trailing way behind—Māori Party members are exempt. I guess there has, however, been some progress. In this year’s Reader’s Digest list of respected professions, we politicians scored second to last, with only telemarketers behind us. That is hardly a vote of confidence in the trustworthiness of politicians, and with issues such as “paintergate”, “corngate”, “speedgate”, “doodlegate”, and all those sorts of things to contend with, it is probably understandable. On the other side of the gate, when the Māori Television Service revealed recently that it was on Crosby/Textor’s advice that in 2003 National decided on the strategy of attacking Māori with the infamous Ōrewa speech or the equally sad “Iwi/Kiwi” billboards, it does not do much for our reputation.
So when we come to the Companies (Minority Buy-out Rights) Amendment Bill, which is described as being driven by the express purpose of instituting a fairer and more clear process, we of course are inclined to be pretty supportive of such a move. But things have become a little bit cloudy. When we looked into the background to this bill, we were referred to the case of Natural Gas Corporation Holdings Ltd v Infratil 1988 Ltd—the first High Court case, I am told, to consider the minority buy-out provisions of the Companies Act 1993. In his decision on that case Justice Doogue said: “It is common ground that the minority buy-out rights sections are defective.” He continued: “Although they provide for the company to nominate a fair and reasonable price for the shares to be acquired, they do not state at what date that price is to be ascertained. Nor do the sections make any provision for the company, in nominating the fair and reasonable price, to give any information to the minority shareholder of the basis of the valuation.”
I have taken a little bit of time to return to the High Court finding, because it is yet another instance where the trust and confidence that the public have in the political system runs the risk of being undermined—undermined by flaws in legislation that Judge Doogue referred to as a “statutory vacuum”. Justice Doogue recommended that if the minority buy-out rights are to be beneficial and workable, they should be urgently reconsidered. In response to Justice Doogue’s findings, the Law Commission report highlighted problems with the existing legislation and concluded it was defective in its failure to set out a workable method of valuation. What they concluded, I see, was that the current test in sections 110-115 of the Act gives insufficient guidance or certainty to companies.
So here we are today looking to amend the Companies Act to ensure that the buy-out regime functions efficiently, cost-effectively, and appropriately. We were relieved to see the recommendation from the Commerce Committee that the concept of “fair and reasonable method” is retained. However, the committee went further and suggested that a “fair and reasonable method” requires an objective assessment of value. Not only are we valuing fairness and reasonableness but we are even putting the effort into measuring that it matters. That is all great and good. I understand that Chapman Tripp, in its submission to the select committee, endorsed this move, advising that statutory guidance as to the fair and reasonable price to be paid was desirable and would provide more certainty. Fairness and reasonableness is actually a very simple concept, and fairness and reasonableness in this bill is in the context of a dissenting vote.
The bill is essentially to improve the way in which a minority shareholding in a company is valued when minority shareholders have elected to have their shares purchased by the company. It seems such a simple concept, but as we know, a dissenting vote in the experience of this House is anything but simple. In fact, the dissenting vote of my colleague Tariana Turia on the Foreshore and Seabed Bill was rapidly followed by her crossing the floor, and the birth of the Māori Party not much later. We in the Māori Party operate from a different premise: that a dissenting vote in itself is not a fatal offence. Indeed, we welcome the opportunity to share diverse experiences and to agree to disagree when consensus appears unable to be reached. I suppose the point is that we must have a process in place from which to respond to dissenting points of view. We welcome, therefore, the initiative in the Companies (Minority Buy-out Rights) Amendment Bill to establish clarity in relation to the process of minority buy-outs and an appropriate methodology for the valuation of shares. The bill, as Chapman Tripp, barristers and solicitors, advised, is a step in the right direction but it does not go far enough.
I just want to wrap up by saying we cannot leave this debate without acknowledging our disappointment that there appears to have been no apparent consultation with Māori companies, no apparent consultation with Māori company directors in the Law Commission review, and no specific submissions sought from Māori companies. At this point I would like to hold up this article from this morning’s Otago Daily Times, headed “Call for Maori involvement with Business NZ”. I would recommend this article to any member of the House with an interest in the future of New Zealand. In this article, the Māori Party candidate for Ikaroa-Rawhiti, Derek Fox, lays down a challenge for Business New Zealand to include more Māori in its organisation, and in the way its policies and strategies are formulated. His argument was that Māori have a huge interest in the future of New Zealand, as collectively tangata whenua are the biggest producers of meat and wool, and the biggest shareholder in the dairy giant Fonterra.
It is a challenge that this House, and this Government, could also respond to, and one which we would have looked forward to seeing in the roll-out of the Companies (Minority Buy-out Rights) Amendment Bill. We make these comments in the honest hope that the Minister and the ministry may take on board the commitment of the Māori Party to do all we can to invest in the growth of business in New Zealand. We look forward to being involved in the future discussions, and to that end we will support this bill at this reading.