Pyne defends BNZ past

By PETER GRIFFIN telecoms writer

Former Bank of New Zealand chief Lindsay Pyne, whose nomination to Telecom's board has attracted controversy, yesterday defended his record and his leadership of the troubled bank 13 years ago.

Pyne has been approached to join Telecom, the country's largest listed company, as an independent director. He will front at Telecom's annual meeting in Auckland on Thursday, after returning from a high-level job in Thailand.

But Pyne's suitability as a member of the governance-conscious Telecom board has been questioned, with critics focusing on a 1993 Securities Commission report that raised concerns about accounting procedures at the bank during Pyne's tenure.

Speaking from Bangkok, where he is an adviser to the president of Bangkok Bank, Pyne said he felt targeted on the basis of events 13 years ago that had been largely settled by the commission's report.

"It's been personalised and blurred, for what reasons I'm not sure," he said.

At issue is a $55 million over-statement of the BNZ's accounts for 1990 under Pyne's stewardship.

In its report, the Securities Commission concluded that the BNZ accounts did not represent "a true and fair view of the results for the period".

Pyne also came under criticism for stating in the 1990 annual report that "the outlook for the BNZ in the medium term is extremely positive", less than four months before the Government stepped in with a $620 million injection to save the bank.

Pyne said the BNZ board and he, as group chief executive, had stood by the accounting decisions, but attitudes towards accounting had changed considerably by 1993 - the year of the inquiry.

"Yes, the chairman and I signed the accounts on behalf of all the directors, but that was a decision we took under advice," admitted Pyne.

"Three years later the Securities Commission had a different accounting view on how we should have treated it, but they were looking at it with 20-20 hindsight."

He pointed out that the commission had made no mention of "fraud, conspiracy or negligence" by directors, auditors or shareholders.

Pyne rejected criticism that he had no relevant telecoms experience.

He said that during his time as president of Visa International for Asia Pacific, he had been responsible for Visa's technology assets in Singapore and Japan.

"Visa was really about technology and marketing. It had leased lines to every one of its merchants."

Pyne said the challenges facing Telecom were "enormous" but that its present management had "vision".

Telecom's chairman, Roderick Deane, reiterated his support for Pyne, saying the would-be Telecom director had helped to turn companies around.

"He's been involved in helping turn [the Bangkok Bank] around from the Asian crisis of 1998.

"He did a turnaround at Broadbank and then at PostBank and then at the BNZ.

"That last one was a turnaround from a loss of nearly a billion dollars to a profit. He's very tough commercially."

Nevertheless, the Securities Commission raised concerns about decisions made that Pyne ultimately signed off. Those concerns have been seized upon by the Shareholders Association, which continues to oppose Pyne's election to the board.

The association is expected to turn out in force at what should be a lively annual meeting.

"We'll have a number of representatives there," said the association's chairman Bruce Sheppard. "Watch out for the entertainment."