Power trustees put cash payout closer to their election day

Power company, Vector New Zealand. Photo / supplied

Trustees seeking a fresh mandate from shareholders in the publicly owned $2 billion Vector power company moved the payment date of the $320 dividend closer to the day voting papers were sent out.

Criticism has been levelled at the Auckland Energy Consumer Trust - dominated by the Communities and Residents ticket - for paying voters their dividend so close to the election.

Trust chairman William Cairns explained the problem was caused by the trust deed, which required trustees to pay shareholders inside a specific timeframe.

He said it would take a court decision to change the deed.

"To change the trust deed is a lot of expense."

It has now emerged the trust went to the High Court at Auckland in 2010 and won the right to pay the dividend at any stage of the financial year.

The rule change meant it could have been paid after the election this month. It was paid on September 26, and voting papers were mailed on October 10.

Trust executive officer Ian Ward said the trustees moved the date after the court judgment. The effect was to put it closer to the election but the intent was to allow more time for the dividend to be paid.

He said the deed had required the dividend payment to be made earlier each year, placing the trust under increased pressure. The change relieved the pressure.

Mr Ward said trustees kept the payment in September to meet shareholder expectations of getting the money that month. The decision took effect last year.

Returning officer Dale Ofsoske said he had previously raised concerns with the trust about the proximity of the dividend to the election.

"It does come uncomfortably close."

The Herald asked Mr Cairns how he appeared to have confused the timing issue.

"This is a technical issue," he said.

Independent candidate Doug Armstrong said the judge who made the change had not considered the effect of the change on the election.

Mr Armstrong said it gave "sitting trustees total flexibility to time the dividend to suit themselves".

"They're playing Santa Claus with the voters, and no one is going to vote against Santa Claus."

David Shand, a candidate for the Your Power Team, said it was cynical of the trustees to make the dividend payment just before voting papers were sent out - and then use trust money to pay for an advertising campaign about the dividend in which they featured.

The Auckland Energy Consumer Trust owns 75 per cent of power lines company Vector on behalf of 300,000 shareholders.

The five trustees get $340,000 a year in fees. Those acting as directors get about $160,000 each.

The line charge share of the power bill from Vector for the average residential customers has risen from $550 in 2008 to $602 this year.