Raukawa learns from iwi settlement missteps, sends board to directors' school

Thursday 28th June 2012

Ngati Raukawa, which received a $50 million treaty claims settlement, has learned from other iwis’ missteps, sending the board of its commercial arm to ‘directors’ school’ and ensuring they bone up on financial literacy.

Earlier this month the Crown signed a Deed of Treaty Settlement for all outstanding historical treaty claims with Raukawa. The settlement included a $50 million commercial redress, part of which was the value of the 2008 Central North Island Forestry Settlement, a stronger commercial relationship between the iwi and state-owned MightyRiverPower and the return of culturally significant sites along the Waikato River.

Investments in the iwi's commercial arm, Raukawa Iwi Development Limited already stood at $50.3 million, according to its June 2011 annual report, after it received $49 million from the Central North Island and Waikato River settlements in September 2010. The latest settlement takes RIDL’s net worth to about $100 million.

"We have seen other iwi go through challenges and we have learnt from that," Vanessa Eparaima, RIDL chairwoman told BusinessDesk. "These funds are provided as redress because of the Crown’s wrongs so it's important that we use them for our future generations."

The board members have been sent on the Institute of Directors ‘company directors’ course, as well as bi-monthly investment education sessions with fund managers from First NZ Capital and Westpac.

A cautious approach will also help RIDL avoid the missteps of Ngati Tama, Taranaki's northern-most iwi, which reportedly burned through about $20 million in bad investments. It received a $14.5 million Treaty of Waitangi payout in 2003.

RDIL strengthened its skill set further by appointing John Spencer, chairman of the neighbouring Tainui Group, to its board. Spencer, who will, start on Aug. 1, was brought in to help Tainui after the tribe wrote off its $6.27 million investment in the Warriors rugby league team in 2000.

A series of poorly performing investments meant Tainui wrote down its balance sheet by $40 million just five years after receiving a settlement claims package worth $170 million.

Yesterday, Tainui Group Holdings, the iwi’s commercial arm, declared a record $11 million dividend. Its profit rose 40 percent to $20.7 million, as sales rose almost 60 percent to $54.8 million, reflecting its hotel and large-scale retail developments.

“Raukawa are a very efficient and motivated iwi,” said Chris Finlayson, Minister for Treaty of Waitangi Negotiations. “The steps they are taking, installing experienced business people like John Spencer to their board, and investing in upskilling, are testament to this level of organisation.”

Eparaima said allocation of the latest settlement funds hasn’t been decided yet though the iwi’s aspirations include the return of land.

"Through treaty breaches, including unjust laws, coerced and corrupt sale, and confiscation, Raukawa have become impoverished and relatively landless, collectively and individually, within a region which was once our complete domain," Eparaima said in RIDL’s 2011 annual report.

RDIL’s parent company, Raukawa Settlement Trust is currently holding the money on term deposit. It will confirm at its next meeting what assets will be transferred to RDIL.

Some $15.4 million from the south Waikato-based tribe’s first settlement claim was invested with Westpac Managed Fund, while $20.7 million in FNZC Managed Investments and $9.6 million is on term-deposits, its annual report said.

Raukawa previously stated it is "comfortable with the strategic allocation of managed funds and will continually monitor the performance of investment managers to ensure it has the best available."

BusinessDesk.co.nz

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