David Shearer in Dunedin yesterday. Photo by Gregor
Labour leader David Shearer is calling for fuller
disclosure on Solid Energy's spending and management.
Though former chief executive Don Elder apologised to the
commerce committee yesterday for some decisions contributing
to the company's current predicament, Mr Shearer said he
would continue to push for a parliamentary inquiry.
Mr Shearer, in Dunedin yesterday to visit businesses and
supporters and to attend the iD fashion show, said the nearly
two hours Dr Elder, and former Solid Energy chairman John
Palmer, spent before the commerce committee, ''was not enough
time to explain why a billion-dollar company was now $390
million [in debt]''.
Solid Energy is carrying at least $389 million debt and has
closed mines and cut more than 450 jobs across the country
since last August.
It is in talks with its bankers and the Government about a
Mr Shearer said issues such as $23 million in bonuses, $130
million in dividends over more than three years, the debt
increase by $300 million and management perks during the past
decade all required more scrutiny.
''Taxpayers are bearing the brunt of Solid Energy's massive
failure - that has to be accounted for,'' Mr Shearer said.
He remains committed to a recent request for a parliamentary
inquiry and if necessary would seek to subpoena Dr Elder to
explain Solid Energy's management.
While acknowledging a 40%-60% decline in global coal prices
was a part of Solid Energy's problem, the Government's urging
it to borrow more and pay dividends was untimely.
''It's clear now the debt it took on was disastrous,'' he
On the question of Solid Energy now seeking a bail-out, Mr
Shearer said he would support, not oppose, such a move to
throw the company a financial lifeline because it had
''reasonable mid-term prospects, and many jobs''.
''We don't want to see it sold off in a fire sale ... to be
Minister of State-owned Enterprises Tony Ryall said yesterday
the troubles with Solid Energy were not due to its debt.
''The problems with Solid Energy come from the fact that the
board made a number of investments that didn't generate the
returns that they were expecting and together with the most
significant collapse in world coal prices a perfect storm has
seen this company in the situation that it's in.''
Mr Ryall said the Government took responsibility under the
State Owned Enterprises Act.
''The law is very clear. It is the responsibility of the
board to manage debt, dividend and investment.''
Mr Ryall said worldwide the financial viability of coal
companies had collapsed.
- Additional reporting by APNZ