Support swells to prosecute Anderton on People's Bank

Friday 10th August 2001

By Jock Anderson

Pressure is mounting to prosecute Deputy Prime Minister and Economic Development Minister Jim Anderton over alleged securities law breaches surrounding his plugging of a taxpayer-funded People's Bank.

The National Business Review reported exclusively last week that top-secret government papers showed Mr Anderton broke securities law and effectively cost the taxpayer $40 million in a buried People's Bank funding blunder.

National's finance spokesman, Bill English, backed calls for Mr Anderton to be held accountable for any breaches of the law, saying "unequivocal" legal advice the government sat on for 13 months should have been acted on earlier.

The Securities Commission had a strong case to take action against Mr Anderton, according to Act New Zealand MP Stephen Franks, an experienced commercial lawyer and a former member of the Securities Commission and the Stock Exchange market surveillance panel.

Mr Franks said the government could have disclaimed Mr Anderton's comments, reduced the risk of liability and still gone ahead with the public-private funding partnership favoured by its officials.

"But the political embarrassment would rank higher in the mind of a very political minister [Mr Anderton] than the technical ability to purge his default," Mr Franks said.

"Mr Anderton is trying to build himself a reputation as a man who understands business. He can't be seen as innocent and naive in commercial matters and this would have hit him squarely in the solar plexus."

Mr Anderton has rejected the allegations, claiming a government decision to totally fund the bank was based on public policy issues about private shareholdings in state-owned enterprises and the cost of a public float, which he said would have been between $5 million and $6 million.

But Act finance spokesman Rodney Hide said Mr Anderton and Mr Burton continued to mislead the public by claiming the funding option was moot because no shares were offered to the public.

"The legal issues go beyond that. But they omit to say why no shares were offered to the public - because Mr Anderton broke the law, whether or not shares were issued, and the government didn't have the guts to admit he was wrong. That cost the taxpayer an extra $40 million," Mr Hide said.

Formal complaints against Mr Anderton were made last week to the Securities Commission and the registrar of companies by Mr Hide.

Mr Hide said the consistent application of the law was especially critical in Mr Anderton's case because he was the minister responsible for the registrar of companies who in turn was responsible for criminal prosecutions under the Securities Act.

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