Top Cat ferry founder 'out for blood'

10.30am

Top Cat fast ferry founder Brooke McKenzie says he will talk to his lawyers today about taking action over Tranz Rail destroying emails.

Tranz Rail has admitted destroying emails related to a Commerce Commission competition inquiry over rival Cook Strait ferry Top Cat.

The revelation was made yesterday in a commission report about its investigation into whether Tranz Rail tried to put Top Cat out of business in 1999 and 2000.

"I'm out for blood," Mr McKenzie told NZPA today. He said he was contacted overseas by reporters yesterday and told about the report.

"I was absolutely staggered, I couldn't believe it. That a company under investigation destroyed pertinent documents.

"If it is a police action to further my cause, I'll certainly be going to police and I'll be talking to my lawyers this morning about a civil action against whoever."

A Commerce Commission spokeswoman told NZPA today it was considering referring the destroyed document matter to police.

However, its inquiry into allegations of predatory pricing was closed due to insufficient evidence and would not be reopened.

The Road Transport Forum's chief executive officer Tony Freidlander said today the document matter should be referred to police.

Top Cat struggled financially from the outset and on October 31, 2000, Fast Cat Ferries announced that Top Cat was being withdrawn. The fast ferry service stopped on November 3.

On the same day, Tranz Rail announced it was chartering Hull 057 from Tasmanian boat builder Incat to start a service on December 10.

The commission called Tranz Rail's action in destroying documents relevant to its inquiry "Enron-like destruction of corporate information".

Mr McKenzie told NZPA a source had informed him Tranz Rail had some potentially damaging documents.

However, Tranz Rail challenged the use of a Commerce Commission search warrant and the Court of Appeal ruled in October 2002 the warrant was invalid and documents seized could not be used.

The commission concluded there was no evidence of below-cost pricing against the Top Cat ferry and that it had suffered difficulties for all sorts of reasons.

But the commission said yesterday it was committed to the use of search warrants, particularly after Tranz Rail's admission its employees destroyed emails.

"What has happened is pretty shoddy. It means that anyone can destroy potential evidence and get away with it," Mr McKenzie said.

"If Tranz Rail had nothing to hide, it would not have destroyed anything."

Mr McKenzie said he had supplied documents to the Commerce Commission during the inquiry and they had arrived back in four large boxes.

"I'm going to start going through them. I'm going to start digging.

"I'll probably approach the Serious Fraud Office again, in light of what's happened, but I don't want to throw half a million dollars at something and come up with nothing -- I'm not prepared to do it these days."

Christchurch businessman Mr McKenzie, aged in his 50s, started Pacifica Shipping in 1983, and has several other business interests.

Started in May 1999, Top Cat's founding shareholders were Mr McKenzie and Roger Swolf. Incat became a shareholder in June, 1999.

"It took blood, sweat and tears and a huge amount of money to achieve what I wanted with Top Cat and it was good competition," Mr McKenzie said.

The Top Cat business could have continued for 20 or 30 years and "had been killing Tranz Rail".

Tranz Rail has since been taken over by Toll Holdings of Australia.

"That's the question -- who do I sue over this," Mr McKenzie said.

Top Cat's collapse had cost him financially and had affected his health and his family," he told NZPA.

However, he had not ruled out starting up another fast ferry service.

"If the playing field was level, yes I could possibly do something again, but it's not at the top of my list at the moment."

The Top Cat ferry was sent to the United States navy, and was now carrying troops and tanks, he said.

Document destruction has become a potent issue for investigators since the Enron scandal in the US.

Enron's auditor, the accountancy firm Arthur Andersen, collapsed after it admitted destroying files relating to a criminal investigation of the bankrupt energy giant.

- NZPA