Dame Jenny Shipley's New Zealand China Council role up in the air: reports

Dame Jenny Shipley photographed in December 2017. Photo / Dean Purcell

Reports suggest former Prime Minister and Mainzeal director Dame Jenny Shipley may not resume her duties with the New Zealand China Council from next month.

Radio New Zealand reports senior members of the New Zealand China Council (NZCC) were told there was no room for Shipley to be re-appointed to the board when it goes through a restructure in May.

It also reported that the Government did not support Shipley staying on with the organisation and that the restructure came as a result of a meeting with Foreign Affairs Minister Winston Peters.

In a statement, the NZCC said there was no basis to media reports that Shipley would be stood down from the executive board of the Council at its meeting next month.

"The chair of the NZ China Council, Sir Don McKinnon, confirms there is a review of the Council's governance and structure underway, which began last year," it said.

"The purpose of the review is to ensure the Council remains as effective as possible given the evolution of the relationship with China and has nothing to do with any issues around individual board members."

The Council will meet next month "but no decisions arising from the review are likely to be made then as consultation with members is ongoing", it said.

The NZCC board which is currently made up of 17 board members will downsize to around nine.

NZCC executive director Stephen Jacobi told RNZ the downsizing of the Council was to make it more effective and had nothing to do with Shipley.

He said Shipley was not going to be dropped from the Council but said it was "a matter for council to decide at the time we consider the outcome of this review but it has nothing to do with recent events around Dame Jenny Shipley."

In February, Shipley and other former Mainzeal directors were found personally liable for creditor losses and ordered to pay $6 million to creditors, as part of a $36 million award by the High Court against the company's directors.

Mainzeal was one of the country's largest construction companies when it went under in February 2013, owing unsecured creditors $110 million.

Just under half of the money was owed to unpaid subcontractors, including tradespeople working on Mainzeal projects.

Shipley was a director of Mainzeal from 2004, and chair of the company when receivers were appointed.

In a 178-page judgment Justice Francis Cooke said Mainzeal directors were reckless, "had adopted a policy of trading while insolvent", and "used money owed to trade operators, particularly sub-contractors, as working capital".

The directors also relied on assurances that the millions of dollars Mainzeal had lent to its China-based parent company Richina Pacific would be paid back if Mainzeal got into trouble.

Following the court decision, Shipley stepped down from the board of China Construction Bank New Zealand a month later.

In a statement at the time she said she believed it was in the best interests of the bank that she retire from the board at the end of March, which coincided with the end of the current reporting cycle.

She said she intends putting her energy into dealing with personal and legal matters related to the Mainzeal case and to spending more time on her private business and philanthropic interests.