Ngai Tahu turns itself inside out

For nearly three years, Wally Stone kept making good money for Ngai Tahu, the country's second wealthiest iwi.

The tribe's commercial activities cast an influential shadow over the South Island's land and sea and he delivered results which other iwi could only envy.

Then, two weeks ago, he was sent packing. His dismissal from chairing Ngai Tahu Group Holdings _ the tribe's money-making machine whose sole shareholder is Te Runanga o Ngai Tahu _ is a classic case study in the business of doing iwi business.

Two basic issues lie at the heart of the crisis: personality politics and the
blurring of lines of what tribal entity controls Ngai Tahu's assets.

Stone's exit started with a report from senior runanga manager Tony Gray.

Gray wrote that getting rid of Stone could be explained by saying that while he had done a great job building the commercial base, a new environment meant different governance structures were needed.

The report also savaged Stone's "unprofessional" and "inadequate behaviour" over four pages.

Before the internal paper surfaced, Te Runanga kaiwhakahaere (chairman) Mark Solomon echoed Gray's rationalisation to media and denied any political reason for the dismissal.

Later, in an email written by Solomon to a relative who had spoken out about the dismissal, the iwi leader was more forthcoming. "Look around, fool, how many in the whanau support him. Everyone I have spoken to despises [Mr Stone]."

Solomon has refused interview requests since the report was leaked, but his attack reflects tensions which have turned the small but wealthy tribe inside out.

Ngai Tahu owns significant assets and its diversification since 1998 when it received $170 million in a Treaty of Waitangi settlement has made it one of the richest tribes in the country. It is now worth about $600 million.

Last year, Stone led Ngai Tahu Holdings Corporation to its best results in its decade-long history by increasing value by $58 million.

Lauded by institutions such as the Business Roundtable as the model of best practice for its clear separation of governance and business arms, the tribe seemed to glide through the mine field that beset other iwi such as Tainui in post-settlement phases.

In wealth terms, Tainui is now level-pegging with Ngai Tahu because it cleaned up its act, echoing what the South Island iwi did by defining Tainui Group Holdings as the profit-producing arm.

Inherent in Tainui's success and stability is the relative protection it has from internal political interference.

But divergent views within Ngai Tahu are emerging about the best way to manage assets.

The Gray report outlines perceived failings of the current separation between the commercial arm and the social, political and governance group _ which Te Runanga is responsible for.

It criticises the holding company's inability to recognise "that [the runa nga] is in essence a family company and as such will operate differently from a public company. They appear to have modelled themselves as a public company which is not always appropriate'."

In an earlier interview, Solomon told the Herald that governance changes would be put before Te Runanga.

"It would be fair to say for the last 10 years the direction of the tribe has been more bottom up than top down as we grew into our role.

"The new governance structures that we wish to put in place will clearly have the table of Te Runanga setting the parameters and the performance requirements that we need. It will be a top down structure," said Solomon.

That riles Tahu Potiki, a former Ngai Tahu Holdings chief executive.

Potiki, who heads a constituent runanga _ Otakou _ which make up the larger Te Runanga body, said: "My response is I don't know what he's talking about, I haven't heard anything about a new governance structure."

The holding company did need clear parameters from Te Runanga but only around making a profit. After that it should be left alone, Potiki said.

"Let them loose. It's a surefire way to see a business fail by having ten thousand bureaucrats crawling over your business plan."