KEY POINTS:
Who planted the story that Auckland Airport chairman Tony Frankham was considering "action" against the Herald on Sunday over last week's column, which revealed he had twice briefed the Prime Minister ahead of shareholders on key decisions during the protracted takeover saga?
Was the plant designed to head off any institutional shareholder that might be contemplating seeking redress if the Canadian Pension Plan Investment Board's (CPPIB) 40 per cent takeover offer is scuttled?
Or did someone simply try to get "the Beehive" off the board's back by insinuating that this columnist was telling porkies?
For his part, Frankham says the Independent Financial Review's front-page lead story was "totally wrong".
"I did not say that to Denise McNabb - that I was contemplating legal action. It's just never, never, never been anywhere near my head," he told me after I called the airport's board PR adviser Jenny Raynish seeking clarification after McNabb's story was published.
"What I wanted to confirm to you immediately is that I have never contemplated, thought, and I see no reason why I would think of legal action, and I have never ever suggested to any reporter that that is what I was contemplating doing."
I'm not suggesting the Independent made the story up although that's the net effect of what it published in relation to me. For many years the financial paper used to make a practice of trying to undermine other business journalists' stories when it had been scooped. It was personal and nasty stuff.
Or whether there has been some deliberate mischief-making designed to get the spotlight off Frankham's board and the Government at a time when investors are asking hard questions about why neither party is in favour of a partial takeover offer that promises a big premium to current market prices, and, why the Government left it so late in the piece to change the overseas investment rules to make "local control" a factor when assessing strategic infra- structures on sensitive land.
Finance Minister Michael Cullen has stressed the Government is treading a careful path to avoid giving any reason for the CPPIB to seek a judicial review if it is ultimately turned down by the two Cabinet Ministers who will make the final decision on its overseas investment application. That's if the fund passes the first hurdle and gets acceptances for 40 per cent of the airport shares by drop-dead date on Thursday.
A bit of digging reveals "the Beehive" sought explanations from Frankham the day after the Government made its announcement.
Andrew Kibblewhite, who is director of the policy advisory group in the Department of Prime Minister and Cabinet, tried to get hold of Frankham on Tuesday morning.
But because Frankham was unavailable he spoke to the airport's company secretary Charles Spillane. "Charles explained to Andrew the conversations or the calls that I had made," Frankham said. "Andrew then phoned me back because he wanted to hear me say it and I said it didn't quite tie in with what Charles has said. Charles was confused with the advice to the market on the amalgamation, and I was talking about the advice to the market on the takeover. I was not chairman at the time of the amalgamation and I spoke to nobody [then]."
When Clark was button-holed by journalists, she said: "Mr Frankham left a couple of messages on my answerphone about the recent board decision. I understand it's normal for senior business people to give heads-up in that way."
But the Herald on Sunday understands that had not been normal practice until Frankham took the chair. Former airport chairman John Maasland confirms he did not brief Helen Clark ahead of the previous Dubai bid announcement, which was jettisoned after vocal political opposition.
Former airport director Mike Smith said it was "outrageous" that Frankham should communicate with anyone ahead of shareholders. Smith, who supported the CPPIB's initial amalgamation proposal, is concerned that it is the Government which extracted a full price for its majority shareholding when it floated it unconditionally in the late 1990s. That looks likely to prevent shareholders from extracting a similar benefit through the new local control clause.
"Let's hope 50,000 shareholders remember that come election time."
There is clearly room for considerable angst to develop in coming weeks, particularly if the Canadians swing their High Commissioner into action - as has been mooted by their legal adviser - to protest any negative recommendation from the Overseas Investment Office, or, negative decision by the two Cabinet Ministers.
To clarify the record, I asked Frankham to outline again just what he conveyed to the Prime Minister. He was happy to do so.
He reconfirmed he called Helen Clark on the Sunday night before the airport board announced its target company statement in mid-December, which spelt out in nationalistic terms why it was against the Canadian bid.
"She phoned me back. I read to her a very sterile 'this is what the board is announcing tomorrow'... There was no advocacy conversation. She said, 'Thank you, I appreciate the courtesy' and that is the only time in my life that I have spoken to the Prime Minister."
He also phoned Helen Clark on her cellphone before the February 25 announcement but got a recorded message, "Peter [Davis] is the recorded message". "I said I was chairman of the airport. I read the [board's] statement copy of that headed 'In confidence' at the top and that is the only communication I have had with the Prime Minister."
The full-page announcement said that "the directors of Auckland Airport today unanimously recommended that shareholders should sell their shares into the takeover offer from the CPPIB for $3.6555 per share (less the 5.75 cents per share interim dividend to be paid next month). However directors are not unanimous on whether shareholders should vote in favour or against CPPIB acquiring up to 40 per cent of the company."
Frankham reveals he also conveyed the same message to National Leader John Key, Auckland Mayor John Banks and Manukau City Mayor Len Brown. Key confirms he spoke to Frankham at about 8.30am, just ahead of the market opening.
It is clear from this that Banks and Brown - as representatives of two of the airport board's major shareholders - were also given a heads-up but the private shareholders, who between them have just over 75 per cent of the company, were not in the loop.
There is no suggestion that any party could advantage itself from insider trading as the briefings took place before the market opened.
Frankham said: "I am honest to a fault I will not tell untruths... that's exactly the position. My colleagues are saying I probably shouldn't have told anybody I gave that advice to the Prime Minister.
"But you put to me a question, I had to either lie, or say I'm not going to tell you the answer or tell you the truth. I chose to tell you the truth."
It should have been obvious to the Independent all along that last week's column relied - in part - on some frank on-the-record comments made to me by Frankham.
So if it wasn't Frankham who planted the story, maybe the Independent can enlighten us who gave McNabb the "bum steer".
