Labour's Clayton Cosgrove has accused Solid Energy of excessive spending in the year leading up to the company's near collapse, after it spent $1.8 million on international travel in 2012, as well as $205,000 on a private investigator firm and almost $1 million on communications staff salaries - more than double the salary costs in 2009.
The information provided to the Commerce Select Committee by Solid Energy showed the company expected to spend about $48,000 on Wellington lobbyist firm Saunders Unsworth which had advised it before Solid Energy's bosses' hour long appearance in front of the committee in March this year when it had to front up about its financial woes. Former chairman John Palmer and former chief executive Don Elder were subsequently also called to appear before the Select Committee.
Solid Energy said it had contracted Saunders Unsworth at short notice because it had a relatively new management team which did not have much experience in select committee appearances.
Earlier this year, the Government revealed Solid Energy was on the verge of collapse and $390 million in debt after struggling with dropping coal prices and investments that did not pay off. In a statement to One News about the costs, it said the 2012 figures were before it was aware it was in financial trouble. Since a restructure in 2012, it had pegged back in many areas.
In the documents, Solid Energy defended the $1.8 million travel bill, saying it was 0.2 per cent of its operating profit and as a major exporter, its executives had to travel to its major markets. As the only coal mining company in New Zealand, it also expected mine supervisors to travel to visit similar mining companies overseas to help improve productivity and safety. Last year it also had 123 staff with cars they could also use for private purposes - up from 72 in 2008. That number had dropped back slightly to 115 since the restructure but was still expected to cost the company more than $1 million although between $8,000 to $13,200 was taken off the base salary of those staff for the use of the car.
The information shows that Solid Energy was spending significantly less on advertising and corporate publications - it spent $336,000 last year compared to $708,000 in 2008. However, it had spent significantly more on public relations and communications staff. Last year it had nine communications staff on salaries totalling $993,000 - up from six staff who earned $480,000 between them in 2008. It has since drastically cut its communications team in a restructure last year down to four fulltime and one part time positions. Last year Solid Energy also spent $170,400 on external public relations advice and $205,000 to private investigations firm Thompson & Clark Investigations, which provided it with security advice.
Mr Cosgrove said that the spending showed the need for a full inquiry into Solid Energy, which was tagged as part of the Government's asset sales programme but was taken off the block after the extent of its financial troubles became clear.
Solid Energy spending:
$1.8 million on international travel in 2012 - up from $1.1 million in 2008
115 staff have work cars they can use for personal use - up from 72 in 2008
$205,000 on private investigation company Thompson and Clark Investigations.
$48,000 spent on lobby company Saunders Unsworth for Select Committee preparation
$993,000 on communications staff in 2012 - up from $479,000 in 2008
$336,305 on advertising in 2012 - down from $708,000 in 2008.