Brian Rudman: Vector tragi-farce now in hands of the lawyers

COMMENT


A high Court gagging order prevents me and the other owners of Vector, the electricity lines company, from knowing whether our elected trustees voted for the partial privatisation of our company at last Saturday's meeting.

But given that the two pro-privatisers on the trust, with the backing of Vector lawyers, obtained two High Court orders bringing their three anti-privatising fellow trustees to heel, it's not hard to surmise the privatisers must have won.

The big question now is whether the victorious minority, chairman Warren Kyd and Karen Sherry, will return to court to follow up their interim request of last Friday, that Justice Helen Winkelmann sack the "rebel" majority and replace them with three un-elected substitutes, all of the right-wing Auckland Now team - Sam Bassett, William Cairns and Earl White. It's an attempt which makes mock of Justice Barry Paterson's warning on Wednesday that trustees had to leave their politics at the meeting room door.

Mr Kyd told me yesterday he didn't know whether he would force the issue. "I think we'll know next week. I'm in the hands of lawyers."

The only thing I can think of in favour of such a profoundly undemocratic attempt to silence one's opposition is that a full hearing could provide the opportunity for a robust debate on the nature of governance in publicly owned private enterprises such as Vector.

At such a hearing, there would be the chance for the appointment of a counsel to act on behalf of the income beneficiaries - in this case, the electricity consumers of Auckland and Manukau cities and Papakura.

Last week's actions were part farce, part tragedy. Vector wants the permission of it's 100 per cent owner, Auckland Energy Consumer Trust, to raise funds to buy other energy enterprises by selling shares. The present proposal would dilute the trust's holding to 75.1 per cent.

Two trustees supported this, three were against. Last week, following a hearing before Justice Paterson, lawyers for Vector and Mr Kyd obtained a court order disallowing John Collinge, an opponent of the share offer, from voting on the issue because he was compromised by his interest in $200,000 of Vector bonds.

Mr Kyd's casting vote neutralising Mr Collinge gave the pro-privatisers a 3-2 majority. They promptly called a meeting to consummate the deal. The opponents finessed this by boycotting the meeting, leaving Mr Kyd without a quorum. They also gave seven days notice of a meeting to sack Mr Kyd as chairman and put in one of their own. That would then give them the casting vote and a majority.

Mr Kyd and the company responded by demanding the High Court sack the three recalcitrant trustees for not turning up to Mr Kyd's meeting.

On Friday, Justice Winkelmann recoiled from sacking the three but ordered them to attend a trust meeting the next day at which only the vote on privatisation could take place. If the "rebels" didn't front up, she ruled that a quorum of two would be sufficient. They turned up and presumably the deed was done.

Whether this part-privatisation project eventually goes ahead we'll have to leave to market forces and the lifting of suppression orders. What's left to ponder is how on earth a majority of three to two against privatising came to be defeated, steam-rollered with the assistance of the High Court and the directors of the company they owned.