Airing their sense of betrayal

By KARYN SCHERER

When the Labour Government decided to privatise Air New Zealand in 1989, Stuart Collins bought into the hoopla.

The Manurewa Machine operator could afford only a few hundred shares, but he thought he was investing wisely.

"There were two reasons: one was as a nest egg for when I retire, and the other was because I believe things like that should be owned by New Zealanders, rather than foreigners," he recalls.

Now Mr Collins, like hundreds of other small investors, is feeling betrayed.

He has seen the value of his shares nosedive and his confidence in the company's management has been shaken.

He is particularly angry at the lack of information given to small shareholders about the company's financial position.

"The only thing shareholders know is what we've seen and heard on TV, radio and in the newspapers. You'd have to ask questions about Ansett Australia. If they've owned 50 per cent of it for five or six years, why were they not aware of its problems? And why were they prepared to pay over the odds for the half they didn't already own? It does strike me as a bit of a bizarre situation."

Although Mr Collins has all but written off his investment, he knows he is one of the lucky ones.

"You have to feel sorry for everybody really, especially the people on superannuation relying on the dividend income.

"You've also got to feel sympathy for the people at Ansett Australia. They've worked all their lives and suddenly they're left with no redundancy money and their super money is in doubt."

Another investor who contacted the Weekend Herald said he had used all his retirement savings to buy 40,000 shares at $2 each five years ago.

The man, who did not want to be identified, said he had been shattered by the airline's problems.

"At the end of the day, I reasoned, the big shareholders would always make sure the company did enough to remain viable and pay out a reasonable dividend," he wrote. "How wrong can one be?"

Auckland University student John Anderson also has some questions he would like answered by the company's board, "like, why they continued to pay high dividends when they knew they would be needing the money to recapitalise?"

He would also like to know why Brierley Investments did not want to invest more than the $150 million it had agreed to "when they have obviously done quite well out of previous dividend payouts".

Mr Anderson, who is studying commerce, bought fewer than 1000 shares with his partner two years ago.

He was particularly annoyed when the company announced a rights issue to pay for its Ansett investment, but did not initially reveal the extent of its losses.

"Things have just got worse. We feel like we've been left in the dark."

He is philosophical about the money he has almost certainly lost.

"I don't think you can feel sorry for anyone who invests in the sharemarket. You get paid a greater return for the risk you take, and people need to realise that."

He would be sticking to term deposits from now on.

"I had Brierley shares in the '87 crash and I held on to those for 14 years and ended up selling them for $2 ... I honestly thought they'd come back so I'm a bit disillusioned with the whole sharemarket."

Shareholders' Association chairman Bruce Sheppard said he was aware of dozens of other investors who faced financial problems.

"It's sad that shareholders have lost all their money but, frankly, that happened six months ago - they just didn't know it."

The association has written to Prime Minister Helen Clark urging the Government to act in the national good "and if that means the existing shareholders of Air New Zealand end up with two-fifths of diddley-squat, that is as it has to be".

Mr Sheppard said the continuing uncertainty over the airline's future was unacceptable.

"There is a point in a company's history where the issues of shareholders become secondary to the issues of national good. That is now where Air New Zealand is at."

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