Friday, March 15, 2013

More contempt from Solid Energy?

Yesterday, Solid Energy's Don Elder and John Palmer finally fronted up before the Commerce Committee to answer questions about how they'd run the company into the ground. During the hearing, Palmer specifically denied claims that Solid Energy had asked the government for a billion dollar capital injection to fund expansion:

Mr Palmer also said the company had never approached the Government seeking a $1 billion capital injection, as suggested by Mr Key shortly after it was revealed late last month the company was struggling under $389 million in debt.

"Were we talking to the Government about the possibility of capital and receiving that from the Crown? The answer is no," Mr Palmer said.

"A specific $1 billion capital injection, I'm reasonably sure we did not ask for it in exactly those terms."

It appears that he was less than forthcoming:
Prime Minister John Key this morning released documents detailing Solid Energy's ambitious expansion plans which would have required capital investment of $2-3 billion a year until 2021 or a total of up to $27 billion.

Key released the papers in response to Labour's claims he misled the public about Solid Energy approaching his Government about a $1 billion investment to become the "Petrobras" of New Zealand, a request he says his Government turned down.


In the 2010 documents, Solid Energy is reported as tabling a proposal to transform itself into a "National Resource Company" whose operations would include coal mining, lignite conversion to higher value products, coal seam, underground coal gasification, and marine methane hydrates.

A report on Solid Energy's proposal is here, and Treasury's response is here.

Palmer may claim that he was technically correct, in the same way that Bill Clinton did when he claimed that "I did not have sex with that woman". But its also clear that he materially mislead the committee. There's a name for that: Contempt of Parliament. And we shouldn't tolerate it.

This doesn't absolve the government of blame for pillaging Solid Energy to pay for its tax cuts for the rich; that seems to have played a significant part in things. But it looks like there's plenty of blame to go around, and some of the responsible parties are trying to lie their way out of trouble. They shouldn't be allowed to get away with it.