Stiassny's big issues

Michael Stiassny

Michael Stiassny is no stranger to trouble. As the fix-it man called in when big companies collapse, he is never far from the centre of public controversy. But it needs far weightier turmoil to prompt this laconic liquidator into taking a public stand on his private concerns.

This week, it was in his role as chairman of lines company Vector that he took a rare step forward. Responding to the Commerce Commission's threat to control Vector's pricing, Stiassny warned of a "regulatory avalanche" which he believes could smother business growth.

In a rare interview, the Ferrier Hodgson senior partner sat down with the Business Herald to let off some steam about regulation and his wider concerns about the country's direction.

Leaning back in his chair in a 16th-floor office overlooking Queen St, he describes the need for regulation as a pendulum which has swung too far in one direction.

Stiassny came out swinging against the commission when Vector announced its result on Monday, threatening to defer or put on hold $630 million of new spending.

The commission has accused Vector of abusing its monopoly by giving Auckland residential power users a cheap ride at the expense of those in Wellington and on the North Shore.

Stiassny says this isn't regulatory creep - it is an avalanche. He predicts that the regulator's decision will flow on to other businesses.

He believes it is time for people to realise the country needs two things to survive economically. "We can say whatever we like but we need to have people employed and for business to succeed."

Stiassny has clearly chosen his moment to speak out, although he remains cautious and measured as he chooses his words. He begins a sentence, stops, corrects himself. He takes his time to craft the words which get to the heart of his meaning.

And politics, particularly in the Middle East, is one topic on which he won't be drawn, despite his prominence in Auckland's Jewish community.

"I'm Jewish. I support Israel but it would be inappropriate for me to talk about that."

But on business, he has plenty to say.

Vector is just the tip of the iceberg, he believes. Other bugbears on his agenda include Auckland's lack of political unification - and the damage it is doing in terms of holding back the region's economy.

"A lot of us have been frustrated by Auckland's apparent inability to get on with it - roading, electricity, upgrading of lines and environmental spending, although there's a view that's being promoted that we are close to seeing some progress. If so, it's long overdue. We've not spent enough."

Then there is corporate governance and disfranchisement of minority shareholders.

His concern is partly influenced by his ejection this year from the Metlifecare board - against the wishes of minority shareholders.

Stiassny, Peter Fitzsimmons and Hylton LeGrice represented minority interests during last year's $341 million takeover bid by the now joint 82 per cent owners - Macquarie Bank and the FKP property group.

When they got control, the new owners demanded the independent directors' heads. Two resigned but Stiassny polled minority shareholders, who called for him to stay. But by March, he too had resigned, after chairman Jim McLay told him to quit or the board would remove him.

The Shareholders Association leaped to his defence, appealing for more talks between the board and minority shareholders. Stiassny's expulsion was seen as a precedent for allowing major shareholders to dominate.

The experience has left him keen for an overhaul.

"There needs to be a clearer and better environment for minorities to be protected, or at least to have a say in a period where effective control has been taken by a new party."

He praises shareholder investor champion Simon Botherway, of Brook Asset Management, saying at least five other influential people could easily be championing investors' rights - but sadly are not.

"Everyone is quite happy to let Simon do it for them and that's unfortunate. He's a bit of a lone voice."

Stiassny himself takes credit for championing rights, but adds that he does it from inside the corporate world and more covertly than Botherway.

It seems the two think alike. This week, Botherway backed Stiassny's criticism of the commission, saying the regulatory environment was out of control.

The fourth big issue worrying Stiassny is the way businesses deal with unions: he has little time for short-sighted companies that work against unions rather than with them.

He played a key role in Air New Zealand's dispute with its engineers when he was called in as a troubleshooter last year. Engineering, Printing and Manufacturing Union national secretary Andrew Little got Stiassny and Ferrier Hodgson colleague Brendon Gibson to come up with a viable alternative to present to the airline.

"A lot of people don't realise the professional and business acumen unions bring to situations."

Stiassny said he was disappointed at the low attendance last month when Little addressed the Institute of Directors with a speech titled Employment risk: Whose is it? "We're not in the 1960s now. Those days have changed," Stiassny said, encouraging a stronger alliance between business and unions.

Stiassny comes across as one seriously worried captain of industry.

Given the degree to which he is embedded in the workings of New Zealand business, his economic anxieties are the country's concerns.

If Vector loses confidence in the regulatory framework and stops investing, the country could face blackouts.

If independent directors get kicked off boards when they are trying to protect minority shareholders, corporate life suffers. If management and unions can't agree, workers suffer. And if Auckland is being held back economically by a spending dearth, the country suffers.

But it isn't all bleak.

Stiassny takes a more positive outlook on the country's future when immigration is mentioned.

His father is from Vienna and his mother from Berlin; both fled Europe as refugees.

"Immigration creates such a change in the status quo because people have an opportunity to start afresh," he says, citing Pacific Island and Asian migrants as those changing society today.

As for life outside work: "I was going to say that I'd like to think I was a good tennis player," he smiles, stopping himself just in time from making one final correction to that sentence.


Michael Peter Stiassny

* Chartered accountant and senior partner at Ferrier Hodgson.
* Specialist in insolvency, company restructuring, liquidation and due diligence.
* Age: 49.
* Education: Glendowie College, then Auckland University where he graduated in law and commerce.
* Member of the Auckland Hebrew Congregation and attends its Greys Ave synagogue in the city.
* First job in the 1980s: Accountant, Touche Clarke Menzies.
* 1990: Appointed a partner at Ferrier Hodgson, one of Australasia's largest insolvency accounting specialists.
* Positions: Chairman Vector Energy, chairman Metrowater, director Horticulture & Food Research Institute.
* Family: Wife Mary-Lou, three children.