Friday, August 03, 2012

A timely reminder

Currently, the government is rushing to sell off Mighty River Power and other state assets to its cronies. Meanwhile, the Herald has a timely reminder of what happened last time the government engaged in asset sales:

"And there it was: the greatest coup of my business career, the chance to make serious money," crows Alan Gibbs as he pulls off the sale of the century, taking state-owned enterprise Telecom off the government's hands in 1990. Three years later he and business partner Trevor Farmer get their big payday when they stump up about $200 million for 112 million Telecom shares. They immediately sell 67.5 million shares for $256 million, making a cool $56 million profit. Plus, having bought at $1.81 and sold at $3.80 per share, the balance of their shares is worth about $170 million. An asset sale deal close to heaven.
Its a perfect example of the corruption inherent in the process, which sees insiders and cronies enrich themselves at the expense of the public.

Don't let it happen again.