In perhaps the least surprising and most anti-climactic political decision of the HB year, the Hawke’s Bay Power Consumers’ Trust voted Friday to keep itself in business as the holder of Unison’s shares. The sunsetting of this body will have to wait.

The five Trustees ‘deliberated’ at a public meeting lasting barely a half hour, assuring those within earshot that they had carefully considered all the evidence — reports and submissions — and concluded unanimously that no change (i.e., no other distribution of some or all shares) was best.

Par for the course with the Trust’s procedural sloppiness over the entire review process, not recording of the Trustees’ individual reasoning or views was made. Not that anything profound was said. These notes sent by Chair Diana Kirton are a flimsy record of a decision affecting 60,000+ beneficiaries and their $900 million plus company.

Chair Kirton did continue to defend the Trust’s determination to not provide an estimate of the value of Unison shares, claiming such information would only be relevant if in fact the Trust were deciding to part with some or all of them.

Or as I would word it: “Given that there was absolutely no chance in hell from the outset that Trustees might dispose of shares, it was pointless to establish their value.” Some would term this predetermination.

Even if the Trust were technically correct, which might face further challenge, the Trustees have entirely missed the larger point. Serious people constructively engaged in questioning the status quo wanted more information about the shares at the centre of all this attention. A public interest-minded Trust would have accommodated that interest, not fought it.

And in fact some of us found our way to credible estimates of the share value, which the Trust was in no position to refute, but nevertheless stonewalled and refused to validate the estimates floating about.

Why? As councillor Jock Mackintosh noted in his submission, knowing that value (‘rumoured’ in the $12k-$15k range) would probably have materially affected how potential beneficiaries felt about the ownership proposition. Something the Trustees didn’t want to trigger.

The process has been a farce. In part because of deliberate choices the Trust made; in part because of its pure ineptitude.

In my last article on this saga, I portrayed the HBPCT as a Mickey Mouse operation. Some might have felt that harsh. But they haven’t observed this process anywhere near as closely as I have. So I’ll stand by my assessment.

What next?

The Unison directors in their report did ‘invite’ the Trust to instruct Unison to look more closely at the ownership structure over the next review window. Why? Because both Unison and PWC in its report noted that the company’s capacity to raise significantly more capital given unpredictable external factors (e.g. regulatory change, more severe weather or other natural disasters) might in fact be constrained by the current structure. Best to get ahead of the curve.

I’m eager to see what will become of that invitation.


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1 Comment

  1. One wonders if the Trustees actually understand why they are there.

    Much of the discussion centred around how well Unison has performed under Trust ownership.

    Maybe that is understandable if the Trustees actually believe that the Trust “oversees the operations of Unison” as stated on the home page of their website. That is nonsense of course. There is nothing in the Trust Deed to that effect, and rightly so. That is clearly the responsibility of the professional Directors of Unison.

    On the other hand the Trust Deed requires the Trustees “to hold the shares in Unison upon Trust for the benefit of the Consumers” [and the Consumers are clearly defined in the Trust Deed too].

    Would you trust anyone to hold shares for your benefit if they didn’t know the value of those shares?

    “We have asked repeatedly for the Trustees view, or opinion, or estimate of the value of Unison or the value of a parcel of shares. They refuse to answer. Their legal opinion says “the information does not exist”. Oh really!!”

    We have never asked for a formal assessment of the market value of Unison. There is no need. We have ample evidence from a variety of reliable sources that show the value of a parcel of shares to be more than $12,000. Evidence from the ex CEO of a large lines company, from the Chair of a different large lines company, even a recent comment from the Trust secretary who put the market value of Unison at about $800M.
    If the Trustees don’t know and understand this then one would say that they are incompetent and ought to stand down.

    If the Trustees do know, then why won’t they tell the Consumers that they are supposed to be acting for? They don’t want you to know!

    Trust law requires them to act for the benefit of the Beneficiaries, and for no other purpose.
    This is not a Trustworthy Trust. It is more like a Secret Society, and. Micky Mouse one at that.

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