Support swells to prosecute deputy PM

Friday 10th August 2001

PETER CASTLE: Original advice 'conservative'

Mr Hide said government ministers in opposition stained the reputation of business people and the stock exchange with allegations of "real and imagined breaches of commercial law and morality."

"Then and since they have referred to New Zealand as a 'wild west.' They have talked of a need to restore confidence in the integrity of our regime, and threatened tough enforcement of securities law. They introduced huge new penalties for breaches of the Commerce Act."

He said patent breaches must attract enforcement liability with the "prominence of the culprits making it even more important to set a good example."

Observers said the high-profile complaint was a test of the commission's independence and it may be kept on hold until September 1 when Australian Jane Diplock takes over as commission chairwoman.

"If the commission really wants to underscore its commitment to compliance and integrity it could not find a better case to pursue," Mr Franks said. "It's not a case of serious breaches with far-reaching devastating market consequences but if the commission pursues the deputy prime minister the commission will show there is one law for all and that it is independent and determined to fearlessly pursue breaches."

Challenging Mr Anderton's bid to justify full government funding of the bank by raising public policy issues, Mr Franks said the State Owned Enterprises Act contemplated private sector investments in SOEs.

Mr Franks described as "laughable" a hastily obtained "so-called legal opinion" waved in parliament by State-Owned Enterprises Minister Mark Burton in a bid to deny Mr Anderton's offences.

Mr Franks said only one sentence of the seven sentence "opinion" - prepared by health and energy specialist Peter Castle of Bell Gully - looked liked a legal assessment.

Describing the Bell Gully letter as akin to a "Liberian flag opinion of convenience" Mr Franks said Mr Burton's claims that the "opinion" cleared Mr Anderton were "unethical."

"A business person using a document like that would be liable for being misleading or deceptive under securities law or the Fair Trading Act," Mr Franks said.

Mr English doubted the Bell Gully "rent a lawyer" opinion, or another opinion hastily obtained from the Crown Law Office on Tuesday, amounted to fully considered opinions, compared to the government's original one outlining Mr Anderton's breaches.

Touting the bank last year on national television and promoting a proposed public redeemable preference share float as safe and risk free misled the public and opened Mr Anderton, the Crown and potentially any director of the bank or New Zealand Post to civil and even criminal liability, according to Mr Hide.

Because of Mr Anderton's breach government options for funding the bank either totally through a public redeemable preference share float or a public-private partnership had to be cancelled, Mr Hide said.

A public-private partnership was favoured by the government's own advisers, who originally rejected a plan for the government to totally fund the bank.

Taxpayers now face an $80 million bill to establish the bank, instead of a partnership option that would have cost half that.

Mr Hide said ministers were not above the law and Mr Anderton must be held to account.

Securities Commission chief executive John Farrell refused to say what would happen to the detailed complaint against Mr Anderton, or discuss it.

Companies registrar Neville Harris confirmed a complaint about Mr Anderton was received. Officials said that in the normal course of events such a complaint would be investigated by the office's securities and compliance unit and advice sought from the Crown Law Office before a decision was made to prosecute.

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