Blunt questions for board of directors

By DANIEL RIORDAN and FRAN O'SULLIVAN

When Air New Zealand's shareholders meet to approve the bailout negotiated with Singapore Airlines and Brierley Investments, there will be burning questions.

Both Singapore Airlines and BIL have taken a bath on their stakes: SIA at $355 million and BIL upwards of $250 million as the Air NZ shareprice dived another 28 per cent yesterday.

But Air NZ's other shareholders - 39,000 of them - have also lost a bundle. Major financial institutions such as AMP featured in the June 2000 list. But so, too, did Air NZ's staff who have invested under two staff share purchase schemes.

Well-known investors such as Montana chairman Peter Masfen also feature, but may have got out before the bloodbath.

But the great majority of the company's investors are small - 35,000 of them own fewer than 5000 shares - putting them in the "mum and dad" category.

Some of the questions they will want their directors to answer:

* Did you thoroughly examine Ansett's books before buying the outstanding 50 per cent?

* Just how much due diligence was carried out and what advice did you rely on when making the board decision to buy the 50 per cent?

* When did Air NZ managers find out just how bad the situation was at Ansett?

* How could you have allowed Ansett's situation to continue to deteriorate to the point where it almost brought Air NZ down?

* Please justify why you paid Gary Toomey and other senior Air NZ executives bonuses in the June 30 year.

* What really happened around the boardroom table between you, the major investors and the Government representatives?

* Show us some evidence that your version of events is correct.

* What assurances can you give that Air NZ will not get into further difficulties?

* Have you securely ring-fenced Ansett's debts or are will Air NZ be liable for some of its debts?

* If Air NZ does not have a legal obligation to Ansett's staff and creditors, does it have a moral obligation? (This is perhaps a question for big-hearted shareholders.)

www.nzherald.co.nz/aviation

www.nzherald.co.nz/travel