Trust Dismisses Vector Director - 16 June 2004 Print

Warren Kyd, Chairman of the Auckland Energy Consumer Trust, today announced that its representative on the Vector Ltd board of directors, John Collinge, would cease to be a director following the next board meeting on June 23.

This decision has followed several months of dialogue with the Minister of Energy Pete Hodgson, regarding the appropriateness of appointing trustees as directors. On Tuesday 8 June a Special Resolution of Shareholders was passed, in which the Trust, as Vector's shareholder, resolved that if John Collinge had not resigned as a Trustee within seven days, he would be removed as a director immediately after the next board meeting.

Mr Kyd said that it was extremely unfortunate but not surprising that Mr Collinge had not chosen to resign with dignity, but had instead elected to politicise a decision that had been made in the best interests of the company and good governance. "As the result of a very sound process we have decided that having a trustee in a position of potential conflict is not a desirable position. Mr Collinge obviously doesn't agree, and is expressing his displeasure by once again bringing Trust politics into play."

Mr Kyd described Mr Collinge's recent allegations to the media about secret agendas to privatise Vector as nonsense. "This is just sour grapes. Vector has made no secret, either to the Trust or publicly, of its growth aspirations. Vector's board has a duty to enhance the value of the business for its owner, the Trust, and it is continually exploring ways to do this. It is entirely appropriate that it communicates with the Trust about options it may be considering to raise capital."

"The Trust takes its own duty to consider these options in respect of protecting and enhancing the value of Vector, and acting in the best interests of its beneficiaries, very seriously indeed."

"Contrary to Mr Collinge's statement, any new growth opportunity that the Trust would approve, would have to deliver as an outcome, increased company value and dividends, irrespective of the Trust's shareholding level."

In 1998, the report into the Ministerial Inquiry into the Auckland Power Supply failure identified the undesirability of having "dual roles which bridge the distinct areas of responsibility" of owners and directors.

Mr Collinge was appointed to the Vector board in April 2002 specifically to help Vector in its transition to the new regulatory environment. Following the election of a new Trust in October 2003, the Trust sought clarification from the Minister as to whether the government's position had changed. After ongoing discussions and with significant resistance from Mr Collinge, the Trust finally passed its Shareholder Resolution last Tuesday.

Mr Kyd said that Mr Collinge's replacement, along with that of Wayne Boyd who recently resigned due to other commitments, will be decided once the Trust's independent review of the Vector Board is completed in July.

The Auckland Energy Consumer Trust was created in 1993. It has 100 percent shareholding in Vector Limited, one of New Zealand's largest network infrastructure companies. It is the largest consumer trust in New Zealand with more than 280,000 consumer beneficiaries.