The Green Party has gone on the attack over the recently partially-privatised Mighty River Power (MRP), saying that Greens' research shows that large numbers of the shares ended up in very few hands.
Greens co-leader Russel Norman said that its research, which he said was confirmed by Treasury, showed that half of the shares in Mighty River Power that National sold to retail investors went to just 13,000 people and that 10% of the retail shares went to "just 400 wealthy people and organisations".
"The sale of Mighty River Power saw 113,000 retail investors, referred to as ‘mum and dad’ investors by the National Government, buy 26.9% of the company. Analysis by the Greens and Treasury shows that half of those shares were, in fact, purchased by fewer than 13,000 people who bought an average of nearly $35,000 worth of shares.
"That included a select group of fewer than 400 individuals, trusts, and organisations who bought 10% of the retail shares with an average investment of nearly quarter of a million dollars each. The remaining 101,000 retail investors bought only 13.4% of the company – less than the amount taken by overseas institutions."
The MRP shares were sold earlier this month at NZ$2.50 a share, raising NZ$1.7 billion for the Government.
The final figure of 113,000 investors came after some 440,000 had actually pre-registered interest in buying the shares.
However, in the meantime between that occurring and the offer actually launching, the Greens and the Labour Party had unveiled their policy for a single electricity buyer, which undoubtedly deterred at least some investors.
The Government's pressing ahead with plans to sell 49% of the largest state electricity company, Meridian Energy, later this year. Based on the most recent valuations, this sale, if well supported, could raise in excess of NZ$3 billion for the Government to go toward its target of raising between NZ$5 billion and NZ$7 billion for new state assets.
Norman said that National’s "myth" that it sold MRP to ordinary New Zealanders "has been well and truly busted".
"[Prime Minister] John Key’s ‘mums and dad investors’ line was a con.”
Norman said "the truth" was that 98% of New Zealanders bought no shares at all.
"Half the retail shares went to just 0.3% of the population, and a tiny group of just 400 wealthy individuals and organisations got 10% of the retail shares."
Norman said that National’s asset sales "have been a failure in its own terms".
"The hundreds of thousands of eager buyers that Mr Key promised didn’t show up, so he sold the shares to a small number of wealthy people instead. The shares are not widely held; they are overwhelmingly concentrated in the hands of a few."
Norman said "far more" New Zealanders had signed the petition for a referendum on asset sales than bought into Mighty River Power.
"National should cancel the remaining the asset sales.”
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