The Takeovers Panel made a mistake in granting an exemption to the takeovers code to Australia's Prime Infrastructure in its bid for Powerco and has admitted as much, says new Commerce Minister Pete Hodgson.
But it was not a sacking error. "As far as suggesting it was an error sufficiently
serious that they (the panel) should be sacked or that (chairman) John King should not be reappointed, we would simply balance it up against the totality of the rest of their activity over the period,'' he said.
The panel had completed more than 20 rulings.
Mr Hodgson said he was not the minister who considered John King's reappointment -- previous minister Margaret Wilson did.
But the Government's view was that the panel made a mistake `"and we would say, in the same breathe, they have more or less said the same thing themselves''.
"In general we are satisfied that the Takeovers Panel has been a really useful addition into clearing up the reputation of the New Zealand sharemarket scene,'' Mr Hodgson said.
The exemption allowed Prime to offer all-cash payment to overseas shareholders but cash and Prime bonds as payment to New Zealand shareholders.
At the time of granting the exemption the overseas shareholding was very small at less than 1 percent of Powerco shares. Prime argued successfully that putting the complex bonds and cash offer to the small number of overseas shareholders was very costly.
The panel did not predict it would be exploited so widely and said it would change its processes in similar circumstances. Sharebrokers, supported by the independent adviser to Powerco, Grant Samuel, viewed the Prime bonds and cash as not the equivalent of all cash.
Australian speculators swooped in buying the Powerco shares at less than the bid price of $2.15 to make a quick profit selling on to Prime. Powerco shareholders sold to them because the payment was all cash. Prime snared its target.
National Party finance spokesman John Key acknowledged Mr King's expertise. He said the Takeovers Code needed fine tuning.
- NZPA
