Sheriff John hangs up his spurs

By PAUL BRISLEN


At his retirement dinner, Telecom's longest serving board member, John King, told the audience he would spend only three minutes talking about each year of his service.

Once the laughter died down, he proceeded - to the horror of the audience - to do just that, for all 14 years.

After four decades in commercial law, as a partner with Russell McVeigh and a director of Telecom's board as well as chairman of the Takeovers Panel, this dry-as-dust approach appears to have done King no harm.

It certainly stood him in good stead last week, when he found himself in the firing line over a controversial Takeovers Panel ruling on Prime Infrastructure's $680 million bid for New Plymouth's Powerco.

"That was just one of those unusual ones," says King, showing a flair for understatement.

The panel's decision, to allow overseas investors to receive only cash for their shares instead of a combination of cash and bonds, backfired when overseas investors began buying shares to take advantage of the ruling.

Almost 30 million shares were traded in a day, roughly 10 per cent of the company's overall worth.

"It's just unfortunate that this particular exemption was exploited and we'll make sure it doesn't happen again."

King became a partner with Mckenzie Bartleet, later Russell McVeigh Mckenzie Bartleet, in 1962, and rose to senior partner and chairman of the board in his 40 years at the firm.

He's still on the books as a consultant as well as maintaining a role with several boards, but his bio says nothing of his personal life.

At one point, the mask appears to slip when I ask where he got his degree.

A note of excitement enters his voice. "It's an interesting story, really," he says.

I sit forward in my chair - at last, a glimpse of the real John King.

"Interestingly at that stage, we got degrees from the University of New Zealand. Then it would show which college it was and, in my case, that was Auckland. It didn't become the University of Auckland until later."

Ah, hope.

King was originally appointed by Doug Graham in the early 1990s to the takeovers advisory committee and chaired the panel from its inception.

Initially, it was a panel without a code.

Disagreements in the National Government of the day prevented the code being introduced, but King is pleased with the final outcome.

"The code was written not by Government but by business and I think it works well because of that."

The code was introduced at a time the market was somewhat uninhibited, often described as the "wild west".

"I never liked the wild west comment particularly but it was unsatisfactory that control of a company could be passed overnight without anybody knowing what was going on.

"Clearly those people, institutions and others who had bigger blocks were a good target for those after a controlling interest."

King believes the market has accepted the new rules and is working well with them.

"I think the nature of that process really requires transparency and that helps in the wider area of security fraud generally."

King will remain in the post until early next year.

"I've been prepared to stay on for a period of time to provide a reasonable degree of continuity of membership while we go through the introductory four or five years."

He wouldn't be drawn on the issue of extending his tenure.

"I'd consider it if I were approached, certainly."

When not consulting or doing panel work, King was a stalwart of Telecom's board. Appointed in 1990 when the company was first privatised, King has seen a decade-and-a-half of radical change in the telecommunications industry.

"When I came on board in 1990, we hadn't heard of the internet. Basically, the telephone business in those days was built around calling."

King says the combination of technology, business competition and regulation had kept the company, and its board, busy for the past 14 years. He left this week with a $310,000 golden handshake.

"The rate of change in that industry is huge. Sometimes you can be too quick and technology moves on and, sometimes, you can be too slow. You can't just flip a switch and make it happen."

King was on the board when Telecom made the disastrous decision to buy Australian telco AAPT. He is quick to defend the move, even though it has cost the group and its shareholders as much as $1 billion.

"I think people are a bit unfair ... People would have said in a business like ours you have to be in Australia. You wouldn't hold on to a lot of major clients if you can't offer that transtasman solution."

He also points out that AAPT is contributing to the bottom line.

"It was something that had to be done and [the timing was] just unfortunate."

Ironically, given King's role on the panel, Telecom has been fierce in its opposition to the introduction of a new regulatory environment.

In 2001, the Telecommunications Act was introduced and a regulator, Telecommunications Commissioner Douglas Webb, appointed.

King believes there is a human desire for some external force to make things right.

"If something goes wrong, there's always a tendency for people to say 'we must regulate'."

New Zealand's regulatory history makes it unique, he says.

"New Zealand has probably reacted sensibly more recently because we used to have such a heavily regulated economy. I think most people from all sides of the political spectrum are pretty realistic in terms of the need for as little regulation as possible."

Despite evidence to the contrary, King doesn't believe Telecom dominates New Zealand's telecommunications environment.

"There are all sorts of little guys in all sorts of little areas concentrating on their specialties. I think people lose perspective when they pick one area where Telecom might have a strong position and they get all uptight about it."

When it comes to New Zealand's poor international showing in the high-speed internet market, King displays a cultural point of view.

"People forget there is a huge difference between a country like New Zealand and, say, Korea.

"Sure they've got huge broadband pipes but look at the way they live. They spend their life downloading and playing games.

"It seems to be about all they do. You do have to take a broader picture rather than just statistics."

King believes business people who retire too soon are a loss to the community.

"I think it's unfortunate that just at the time you've learned the ropes you retire and leave it to other people to fall down all the holes on the way through.

"If you look at some of the Asian countries some of the senior people stay in the loop much, much longer."

Clearly the country has not seen the last of him.

John King

Corporate lawyer

* LLB from the University of New Zealand.

* Partner with Russell McVeigh from 1962-2002.

* Director of Telecom from 1990 to 2004.

* Chairman of the Takeovers Panel since inception.

* Member of the Australian Takeovers Panel.

* Consultant with Russell McVeigh.

* Vice-president of the Employers & Manufacturers Association (Northern).

* Member of the Council of Business New Zealand.

* Deputy-chairman of the Spirit of Adventure Trust.

* Member of the Council of the Auckland College of Education.

* Director of WestpacTrust Investments and the New Zealand Guardian Trust Co.