By FRAN O'SULLIVAN
Air New Zealand tried to get Ansett's administrators to use their influence to call off an Australian Securities and Investments Commission inquiry into whether its directors broke Australian laws.
But the administrators stuck firm, insisting that any settlement deal with Air New Zealand over its liabilities to the
collapsed Ansett should not cut across the ASIC's existing investigations.
Administrator Mark Mentha says he has found no evidence of any wrongdoing by the Air New Zealand directors during his preliminary investigation into Ansett's collapse.
Acting Air New Zealand chairman Jim Farmer, QC - who has denied that either he or the board acted dishonestly or recklessly - confirms he has already met the commission to discuss its investigation.
But the directors may yet face legal action over the collapse of Ansett Australia despite Friday's Federal Court ruling, if investigations by the administrators or the commission find enough evidence.
Justice Alan Goldberg's approval for Air New Zealand's offer of $A150 million ($183.4 million) to Ansett specifically excludes actions for "reckless trading" or "trading while insolvent" from a range of prospective legal measures in Air New Zealand's conditional settlement with the administrators.
During marathon nine-hour negotiations in Melbourne on Sunday, September 23, Air New Zealand negotiators led by Dr Farmer stipulated that they wanted the commission to issue "no-action" letters to the airline's directors, as part of the $A150 million deal with the administrators, Mark Mentha and Mark Korda.
A draft memorandum of understanding (MOU) had warned: "If the ASIC refuses to do so, then the proposed agreement will terminate."
But the condition was dropped as negotiations intensified over the memorandum, which was a key precursor to the $885 million bailout of Air New Zealand.
On Thursday, October 4 - one day before the bailout was unveiled in separate announcements by Finance Minister Michael Cullen and Dr Farmer - Mr Mentha and adviser Leon Zwier met ASIC directors and provided them with the "most recent" draft of the memorandum.
"I stressed that the MOU could not and does not in any way limit or affect the ASIC's rights," Mr Mentha said. He told the commission his investigative powers under the Corporations Act did not and could never be limited by the proposed memorandum.
"Mark Korda and I are required to report to the ASIC any breaches of the Corporations Act should we discover them.
"I also informed the ASIC that despite rumours of wrongdoing by the Air New Zealand Group and its directors, I have not presently found any evidence of it."
The final memorandum approved by Justice Goldberg specifically excludes any legal action that might be taken in the following areas:
* Failure by Air New Zealand or its directors to exercise their powers and discharge their duties in good faith in the best interests of the Ansett Group and for a proper purpose under section 181 of the Corporations Act, or reckless conduct or improper use of the position.
* Insolvent trading claims against Air New Zealand's directors - as the holding company - if Ansett is subsequently put into liquidation.
* If any of the representations and warranties in the memorandum are breached.
ASIC chairman David Knott opened a formal investigation into Ansett's collapse on September 14, the day the airline was grounded, threatening 16,000 jobs.
The ASIC - which is also liaising with the New Zealand Securities Commission on the issue - has focused its inquiries on possible breaches of directors' duties and compliance with laws preventing companies from trading while insolvent.
Air New Zealand directors - Dr Farmer, Sir Selwyn Cushing (former chairman), "CK" Cheong (Singapore Airlines CEO), Greg Terry (Brierley Investments CEO), Sir Ron Carter, Liz Coutts, Ralph Norris, Bill Wilson, QC, Michael Tan, Charles Goode, John Curtis, John Rose and Philip Burdon - were also directors of Ansett Holdings in the months leading up to the airline's demise.
But many more parties are named, including former Ansett chairman Ken Cowley (ex News Corp), former Air New Zealand chief executives Gary Toomey and Jim McCrea, and a huge list of directors of various Ansett companies in the period that the administrators' inquiries will cover.
During last week's hearing in the Federal Court in Melbourne, the administrators expressed concern over compromising - in a limited way - any claims against the directors of Air New Zealand Group and the Ansett Group without any investigation.
Mr Mentha said he had told Ansett's creditors' committee that the memorandum preserved the rights and powers of the ASIC.
"The directors were also required to give broad warranties which, if breached, make the conditional releases inoperative."
The court's approval also preserves the administrators' rights to bring legal action against the auditors or any other advisers to the Ansett Group if subsequent inquiries warrant.
The creditors' committee approved the memorandum on that basis.
nzherald.co.nz/aviation
nzherald.co.nz/travel
By FRAN O'SULLIVAN
Air New Zealand tried to get Ansett's administrators to use their influence to call off an Australian Securities and Investments Commission inquiry into whether its directors broke Australian laws.
But the administrators stuck firm, insisting that any settlement deal with Air New Zealand over its liabilities to the
AdvertisementAdvertise with NZME.