Merepeka Raukawa-Tait: Millions lost in sad treaty shemozzle

MONEY WORRIES: The Ngati Tuwharetoa Settlement Trust has managed to lose $50million of its $66million treaty settlement. PHOTO/FILE

Whenever I see a business has gone to the wall I feel sorry for the business owner.

Of course, there will always be circumstances that make it impossible for a business to continue operating and sometimes pulling the plug earlier rather than later is probably the wisest course of action. But I would bet those who invested their money, time and energy, especially in small to medium-sized businesses, wanted to be successful.

Often they put everything on the line; mortgaged their home in some cases, asked family and friends for financial help and maxed out their lines of credit.

But research tells us that more than 50 per cent of new business start-ups are undercapitalised; not surprising as they have probably put their money into R&D, latest technology, fit out and the myriad other activities to be carried out even before they set up shop. And today with many successful businesses operating online only, it is still vital to know what makes good sense and how to stay the distance.

Over the years I have found people who put their own dollars on the line speak a different language from those who have nothing of their own at risk.

Those with everything at stake, who must make money before they spend more, are cautious with how they invest and what they spend money on.

When you've had your feet to the fire, hoping you'll be able to meet next month's payroll, taking little from the business and pouring everything back in for the first few years, you know when someone is speaking from experience. There is never any substitute for having been there, done that. But I can muster little sympathy for Ngati Tuwharetoa Settlement Trust.

It has been reported the original trustees managed to lose $50million of their $66million treaty settlement. Those responsible should be hanging their heads in shame.

It's not as if Ngati Tuwharetoa is one of the first iwi to settle. It isn't. They must have spoken with other iwi post-settlement entities who I'm sure would have shared with them the pitfalls of suddenly taking custody and control of huge settlement monies. These "first off the settlement rank" entities had their problems, too. Some of their initial investment decisions weren't without hiccups. But I believe any iwi asking for advice wouldn't be refused. No iwi wants to see another iwi fail in their endeavours and if past experience and learnings can help, they'll put their hand up.

I have observed that barely have settlement documents been signed than the suits, and investment proposals start to arrive. The smell of money attracts attention, unwanted or otherwise. But it's up to those responsible for protecting and growing tribal assets, for the benefit of current and future members, to understand they are expected to increase the value of settlement monies; not to lose 80 per cent within six years.

Do I believe the Ngati Tuwharetoa Settlement trustees set out to swindle their members? I do not. This is a classic case of trustees either failing to do their job properly or not having the breadth, knowledge and experience needed for the role. They are responsible for this shemozzle.

Listening to the Ngati Tuwharetoa talkback callers from all over the country on radio this week, they are not a happy lot. They pulled no punches in their condemnation of their tribal representatives, settlement trustees and others. They named names. They spoke of lost opportunities and hope for the future. It was sad listening to their despair and disappointment.

They felt they too had suffered reputational damage. And trust lost is hard to regain. And it won't be regained by the same people who are responsible for this mess.

With settlements, initially some financial teething problems may arise. But these can be anticipated. Ngati Tuwharetoa wouldn't be in their current situation if competent and sound financial and investment planning had been in place. At least the capital should have been ring-fenced for five years as significant investment decisions take time.

Thorough research and due diligence must be undertaken on all business investment proposals. If this had been carried out "tribal business bailouts and bad loans" wouldn't have got off first base.

The talkback callers made sweeping accusations of nepotism and gross business and money mismanagement.

Within six years Ngati Tuwharetoa are virtually back to square one.

-Merepeka lives in Rotorua. She writes, speaks and broadcasts to thwart the spread of political correctness.