Grant Robertson's latest letter of expectations for Air New Zealand could create a conflict of interest for its board, National's finance spokesman claims.
On Thursday the Finance Minister wrote to Air New Zealand chairman Dame Therese Walsh setting out expectations around the airline's route network, sustainability plans and industrial relations.
Although the expectations were high level, Robertson described the Government as "an active majority shareholder" and suggested he wanted to be involved in the process of appointing new board members, suggesting a more involved role for the Beehive in the running of an NZX-listed company.
National's Andrew Bayly said the letter complicated the job of the airline's directors who were required by law to act in the interests of the company over the interests of any particular shareholder.
"There is a potential conflict of interest between directors having to act in the best interests of the company, which is a company law requirement, a fiduciary requirement, and on the other side of the coin, having a very clear expectation from the government as a majority shareholder," Bayly said.
"There may be occasions where the board has to operate as an absolutely commercial focus that differs to what is set out in the minister's letter of expectations.
"If you're a board member there is an issue of who is your master? Is it the company or is it the major shareholder? And it's absolutely clear in law, it's got to be the company."
With Air NZ losing money, directors might want to take steps to protect the company which could conflict with Robertson's letter, but with the minister hinting at a role in selecting board members, they could feel pressure to act in a way that favours the Government.
"It puts the directors in an invidious position because the major shareholder has made it clear what his view is which is you must keep the routes open and you should run an industrial policy which is not disruptive, but actually, it may be in Air New Zealand's best interests to make some of those changes."
Air New Zealand published the letter at the same time as it delayed its planned capital raise by at least three months. Robertson's letter was published without comment by the airline on the NZX.
Bayly said the letter "might be perceived by certain types of potential investors who might be interested in doing the capital raise, whether in fact that is seen as a level of interference that people will see as unwelcome because they will think that the company is not going to be run on purely commercial grounds."
Bayly described the letter as "instructive, rather than advisory" and in part even refers to how Robertson believed the executive should behave.
On Monday evening Robertson said the letter simply spelled out what a national airline should be.
"None of this will be unexpected to Air New Zealand. We've been talking about it for a couple of years but we're written it down on paper to make sure everybody's crystal clear," Robertson said in an interview with NewstalkZB host Heather du Plessis-Allan.
Robertson said Air NZ would maintain operational independence, but the Government was setting its expectations around maintaining a network,
"That's not saying exactly what route you have to run, it's just setting that expectation at a higher level."
Robertson did not believe the letter would put investors off taking part in the capital raise.
"Other investors have great confidence that the Government wants the airline to continue and succeed. There's arguably a premium associated with an airline with a 52 per cent government shareholding."
Robertson would not be drawn on whether the Crown may increase its stake through the capital raise, saying simply that the Government was committed to a majority shareholding and was "happy" with the current stake.
Asked by reporters in Parliament whether the situation could create a conflict of interest if the board believed it had to operate outside the expectations, Robertson said: "I just don't believe that will come to pass. I think the expectations we've set out in that letter are very familiar to Air New Zealand."