To Contact Us to page back through Previous Editions click here Index is in right hand column

>March 2009 Edition ----

We thought last months edition might have been a one-off as far as bringing the Prime Minister into the commentary is concerned, but not so. We have considerable concerns over his indication that he would step in to keep the home appliance maker Fisher and Paykel alive and operating should it face financial insolvency as a result of the current crises. The reason he gave was that this was a most iconic New Zealand company, not a very common measure for assessing such matters. The Leader of the Opposition asked if he might give a clearer indication of which companies might expect to get such treatment should they get into trouble and the only answer seemed to be that the threshold was high. We would venture to attempt to provide what we think was the correct answer to that question, being thus: a company must have a high ratio of Jewish personal either among its shareholders, its directors, its executive. or perhaps its staff.

Brian gaynor as written this article in the New Zeland Herald which tells something of the founders of F&P and how parents or grandparents of both had "fled" Russia in late 19th century but did not (presumably chose not) to mention that they were Jewish, as we understand is Mr Key. The odds of them sharing this identity are rather small. There are about 6,500 Jews in New Zealand. That makes about 0.2% of the population. There is a tendency for members of any of the religions to support one another but this tendency is probably diminishing over all and one understandably does not wish to risk encouraging religious hatred by emphasising this fact. But exclusive support for one another it is particularly strong in the Jewish community and Mr Key's comment about assisting F&P Appliances was a surprise to all. Most people would be able to make this connection straight out but Mr Gaynor and other journalists should have pointed it out for those who did not.

To the extent that Jewish business success is due to them having good brains and attitudes that is good. To the extent that it is due to networking amongst themselves that is not good we think. It has been revealed that one First New Zealand Capital (FNZC we will call it) is a financial advisor to Fisher and Paykel Appliances and although we have no idea whether there are Jewish personnel in that firm the association does not impress us one bit. FNZC was advisor to Auckland Airport regarding the resistance of a takeover bid for the Airport. The bid was eventually foiled by political means with the ministers for overseas investment objecting. Why this should have happened at such a late stage beats us.

FNZC and its associates Credit Suisse were to the fore in the sale by way of an IPO of the somewhat iconic New Zealand company Feltex Carpets of course. Fortunately developments concerning this IPO are taking place. In his article following the charging of 5 ex Feltex directors Duncan Bridgeman of the National Business Review has raised some interesting points. Apparently since the Feltex collapse the ex chairman Tim Saunders has said that Board members had serious concerns about weaknesses of its managing director Sam Magill. There was no indication of that in the prospectus and we would think that there needed to be if what Mr Saunders has later said is correct. The prospectus message was that the company was sound and solid and if that is not what the directors were thinking then that is fraud. We think Mr Saunders will retract those remarks. We see that he is now going to stand down from the board of Contact Energy. That company recently talked for the first time about the state of the Cook Strait power cable affecting its profitability when the cable has been that way for some time. That cannot be much blamed on Mr Saunders but the Contact has not been performing to expectations lately and some review was needed.

We think that also Joan Withers needs to go from the Auckland Airport because of her part in the Feltex saga. Interestingly the Airport and Contact have a little in common since they were the major privatisation parcels of the mid 1990s. Ms Withers apparently joined the Feltex board about 10 days before the IPO prospectus was issued and would appear to not have come to grips with what was going on. Her photo would we think have resulted in hundreds of Mum and Dad investors agreeing to make a subscription. But the worst aspect of her tenure with Feltex was that although apparently in good health she jumped ship just when good directorship was needed most to recover at least something for shareholders. The offical excuse we have was to enable her to take up this senior employment position with Fairfax. Funnily she a little later campaigned somewhat to retain her position on the Auckland Airport board. Why was one directorship too much for her and not the other we ask. A new director on the Feltex list should have been able to be relied upon to be around for many years, not for just over a year as happened. It might be legal but there would seem to be nothing moral about it. We think the Fairfax job has been jacked up for her as an excuse to get her out of Feltex. Captain Kirk has been a little too soft of heart we think when approached by feminist interests to make the appointment as we suspect was the case.

Interesting Mr Bridgeman refers to John Hagen who replaced Joan Withers on the board as an accounting supremo. The term seems to have been coined by the Institute of Chartered Accountants back in 2005 when Mr Hagen was made a life member. We used the name for our end of year skit on Mr Hagen's exploits as an expert witness in the case of Hedley v Kiwi and his life membership. We think it is worth a re-read - just click here. We wonder why two directors Messrs Magill and Horrocks have not been charged.