Vector in court slugfest

By CHRIS DANIELS

Vector, New Zealand's largest powerlines company, is facing more wrangling over its privatisation.

Late last night, the High Court was hearing an application to sack three members of Vector's owner, the Auckland Energy Consumer Trust, following an earlier breakaway meeting on a deal to partially privatise the company.

Trustees are being asked to approve the float of 25 per cent of the company, raising up to $700 million, needed to mount a takeover bid for gas transmission company NGC.

Australian energy company AGL is selling its 66 per cent shareholding in NGC, and Vector is a prime candidate to buy it.

A vote on Thursday night to approve the float was scuppered by three opponents setting up their own, breakaway meeting.

Two of the trustees - chairman Warren Kyd and Karen Sherry - met by themselves to approve the deal. A quorum of three is needed for the meetings to count as valid.

The opponents - John Collinge, Mick Buczkowski and Shale Chambers - boycotted the official meeting, instead gathering elsewhere and deciding to meet next week to try to roll Warren Kyd as chairman.

Kyd then launched High Court action, saying that Collinge was in contempt of a court decision issued this week. He also said Collinge and the others were breaching their duties as trustees.

At present Vector dividends are paid to power users in Auckland City, Manukau City and Papakura.

Anti-privatisers say the public will lose control when Vector is listed and dividends will then have to be shared among more owners.

Those in favour of the deal say a bigger, more profitable company will be better for everyone.

Vector lawyer Julian Miles QC, told the High Court that the three trustees had been "driven by a political agenda" and had been given copious amounts of advice about the privatisation plan. They had enough information to make a decision.

They had tried to use procedural methods to circumvent a vote that they suspected they might lose.

Miles described their actions as "a deliberate manipulation of rules to defeat the bid".

The anti-privatisation trustees had shown just what they were up to by refusing to attend a meeting unless they could first vote on a bid to roll Kyd as chairman.

Kyd's role as chairman is crucial because his casting vote could allow the plan to buy NGC to proceed.

Collinge was banned from voting on the deal by the High Court earlier, because he and a family trust own $200,000 worth of Vector bonds.

Kyd's lawyer, Howard Keyte, QC, said the judge could dismiss the three trustees, or simply order that a new meeting be held and that the three must attend and either vote on the proposal or abstain.

Justice Helen Winkelmann was due to give a decision on the Kyd application late last night.

Vector is urging haste, saying that a decision by the trust on "Project Nugget" is needed soon. A new meeting of the trust may be ordered by the court to be held tonight.