Delta inquiry: Companies' integrity on line - Cull

Delta CEO Grady Cameron
Delta CEO Grady Cameron
Dunedin Mayor Dave Cull says the integrity of the Dunedin City Council's companies is on the line after the Office of the Auditor-general yesterday launched an inquiry into land purchases by Delta.

The investigation would examine all aspects of the council-owned company's decision to spend $14.12 million on property at Jacks Point, in Queenstown, and Luggate, near Wanaka, in 2008 and 2009.

That included how and why the purchases were made, consideration of risks, compliance with legislation, and the identification and management of any conflicts of interest, the OAG statement said.

The Auditor-general would also consider to what extent the council - as the shareholder of Delta's parent company, Dunedin City Holdings Ltd - was involved, and any other matters considered "desirable" to report on.

It was not yet known how long the inquiry would take, but "relatively contained" inquiries usually took up to three months, while more complex investigations could take six to 12 months, the OAG statement said.

The inquiry could see those involved required to provide information and give evidence under oath.

Yesterday's announcement came after confirmation last month Delta had written down the value of its investments by $9 million, including by $7.5 million for the Jacks Point and Luggate properties.

The company paid $8.82 million for 9.4ha of land at Jacks Point, and $5.3 million for a 50-50 stake in the joint venture property development at Luggate.

Mr Cull yesterday told the Otago Daily Times the inquiry came after he contacted the Auditor-general's office in early October to discuss information he had received that was "new to me" about the company's purchases.

He would not say what the information was, other than it came from "a variety of sources", covered "a number of things", and "clearly" raised concerns.

"There's clearly questions and concerns that go to the heart of council and community confidence in the integrity, potentially, of council company process." Delta chief executive Grady Cameron issued a brief statement late yesterday, saying he "welcomed" the inquiry and "the opportunity for an independent review of the decision-making processes".

The company would "co-operate fully" and adopt any recommendations that followed, he said.

"We look forward to the outcome." He would make no further comment until the inquiry was complete, and has declined repeated ODT requests for an interview this week.

DCHL chief executive Bevan Dodds said he was yet to hear from the OAG and did not expect to be "too involved" in the inquiry, but would co-operate if contacted.

DCHL chairman Denham Shale - who was appointed after the purchases - said he looked forward to the inquiry's findings, but would not comment on transactions dating back years "made in the climate of the time".

Details of both property deals were reported in 2008 and 2009, but claims of conflicts of interest and other concerns have continued to swirl.

Cr Lee Vandervis - who also complained to the Auditor-general's office earlier this month about the purchases - said he was pleased by the OAG's decision to investigate, and the scope of the inquiry.

It was "too early to tell" who was to blame, but if mistakes were identified, heads should roll, he said.




It is a sad indictment of "open local government" that there is a feeling of a lack of accountability from the directors of Delta and other DCC (ratepayer) owned companies. Ultimately, the elected councillors and mayor of the DCC are the owners acting on behalf of the ratepayers who elected them. It is their responsibility to read reports and and to demand that reporting by DCC-owned companies is in a format that is written for the "owners" to be able to understand. If councillors cannot understand or fail to demand full reporting by subsidiary companies, then they are failing in their elected duty.
What questions were asked of Delta by DCC councillors in 2008 when Delta made Central Otago land purchases, and were Delta directors compelled to release all related information at that time?  [Abridged]  


I would like to draw readers' attention to an opinion piece published by the newspaper in September, written by Russell Garbutt. It's a useful backgrounder to news of the OAG investigation now under way.

Inner circle

Chirpbird: This inner circle has been around for a long time. You must remember them. They that were responsible for landing us with a new stadium against most of our (ratepayers) wishes and against the advice of those that clearly knew better. There is only one way to achieve transparency and that's with someone like Lee Vandervis at the helm.

First Citiworks and now...

First Citiworks and now Delta. As the song lyrics go, "it's all the same, only the names have changed".

New information

I suspect that Cull's "new information" is that there is an election next year. This business has been known about for years and I and various others have made submissions to Council. [Abridged]

Community confidence in integrity?

That was lost when council went ahead with the stadium against public wishes. Here's hoping heads will roll for that too. This squandering of public money has to be stopped. Lee Vandervis for mayor next time around please.

Making excuses so soon?

DCHL Chairman Denham Shale says 'he would not comment on transactions dating back years "made in the climate of the time".

Isn't it a bit early for Denham Shale to make excuses for bad investment decisions? Any financial mistake, that costs others so much, has to be accounted for.

What new information about Delta?

I find it strange that Mayor Cull states that 'new information' prompted him to ask the  Auditor General to make an enquiry into Delta's land deals. Surely the central problem is the fact that the deals were undertaken at all. That  must have been known to the council way back in 2008 when the land was bought.

I wonder if ratepayers will find out exactly what this new information is, how Mayor Cull obtained it (apparently last October), whether it has been disclosed to the rest of the Councillors and if not, why not.

I find Cr Butcher's comments about an 'inner circle' on the DCC worrying. Decisions should be made by the whole council and all councillors should be given full and timely information. 

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