Former Solid Energy boss could be forced to speak

By Kate Shuttleworth

Don Elder. File photo / NZPA
Don Elder. File photo / NZPA

Former chief executive of Solid Energy Don Elder could be forced to appear before a government select committee.

Opposition MPs are calling for a vote to issue a subpoena forcing Dr Elder to front over the $389 million worth of debt owed by the troubled coal company.

Current chairman Mark Ford fronted the commerce committee today with interim chief executive Garry Diack, group manager of strategy and corporate affairs Bill Luff, and chief financial officer Anthony Burg .

They fronted questions over the state of the coal company - but were unable to answer most questions.

Dr Elder headed Solid Energy for 12 years, but resigned on February 4. A fortnight after his resignation the Government revealed the company was carrying $389m worth of debt and was in talks with bankers and Treasury.

In the last financial year Solid Energy lost $40m and subsequently axed a 450 jobs nationwide plus around 240 jobs at Westport's Stockton mine.

Mr Ford said the current state of the coal company was "precarious".

Labour and the Greens renewed a call for Dr Elder to front up to the committee, and were looking at requesting a select committee of inquiry into the failed financial state of Solid Energy.

Mr Ford said it was unusual for former chief executives to appear before the select committee, but said he would not stand in the way of Dr Elder appearing in front of the commerce committee. He went as far as to say he would clear Dr Elder to speak about any payout he received.

Labour's state owned enterprise spokesman Clayton Cosgrove believed Dr Elder was paid out $1.5m in addition to his annual salary of $1.3m.

Mr Ford confirmed Dr Elder was "working from home" in a consultancy capacity and was receiving full pay. He is due to finish with the company on April 1.

Dr Elder did not receive a severance payment but would receive his entitlements under the terms and conditions of this contract, Mr Ford said.

"It's called risk management. I needed to have access, or the company needed access, to Don's memory to have a very smooth transition."

When asked how much the entitlements were, he said: "If Dr Elder was happy for us to report his salary, I am more than happy to disclose what it is".

Mr Ford said a confidentiality agreement in Dr Elder's employment contract had prevented a disclosure of his entitlements.

It was unclear if Opposition calls for a subpoena, forcing Dr Elder to appear, would have the support of government MPs, which it needs for it to be carried forward.

Mr Ford said Dr Elder had not been muzzled from speaking to media.

Dr Elder declined today to respond to questions about whether he would appear before the committee.

He said yesterday he wasn't permitted to speak to the media.

No guarantees were given during the commerce committee hearing from the heads of the company that its $389m debt would not get worse, or that a taxpayer bailout would not be required.

Mr Ford said further restructuring announcements would be announced in a month, after discussions with the banks concluded.

The state of the market was the only reason for the company's financial position, Mr Ford said. He was confident a business plan supplied to the Government and the banks, based on lower coal prices, would allow the company to return to profitability by 2015.

- NZ Herald

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