Vector's majority owner Entrust has taken what it calls an ''unprecedented'' step of asking the company to hold a special meeting of shareholders to dump outgoing chairman Michael Stiassny.
Entrust passed a vote of no confidence in Stiassny as chairman of Vector, "due to his behaviour" in recent months, following trustees' decision earlier this year to not support his re-election.
Entrust distributes a $350 dividend to consumers and its chairman William Cairns said since May, when Entrust decided not to support Stiassny's re-election, his behaviour had changed.
"Our relationship has irrevocably broken down and all trust is gone. We have lost confidence and it is now time to take action to remove him as chairman."
He claims Stiassny had delayed the date of the company's meeting by a month.
Stiassny is an insolvency specialist who has held a number of directorships including being on the Vector board for 16 years.
This morning he hit back saying it is the second time Entrust trustees Cairns, Mike Buczkowski and Paul Hutchison had attempted to threaten him over the Vector board's decision to change the date of the annual meeting.
"The date change was a board decision where each director voted independently on the matter and not – as Entrust would have us believe – at my direction. To suggest otherwise is offensive to my fellow directors and infers poor governance practices.''
Stiassny said that on multiple occasions he had said he was stepping down and that the added expense of a special meeting to achieve something that is already a given is simply bizarre.
"It's just a sad and disappointing example of desperate infighting within Entrust."
Vector said this afternoon it had received a request from Entrust to call a special meeting of shareholders in addition to the scheduled annual meeting advised last week.
''The board of Vector is yet to meet to consider the Entrust request. Further information will be provided in relation to the Entrust request as may be appropriate in due course,'' the company said.
Cairns has outlined what he says has led to the breakdown, including:
• Stiassny implemented a process to make it difficult for Entrust to communicate with Vector, resulting in a breakdown in the operating arrangements between Vector management and Entrust which have been in place for many years. This has caused unacceptable risk and unnecessary disruption to Entrust.
• Delayed setting the date of Vector's annual shareholder meeting at which his re-election would not be supported, without explanation or good reason, despite repeated requests to do so.
• Moved the date of Vector's annual shareholder meeting from September 27 as confirmed to Entrust by Vector (similar timing to previous years and consistent with advice given to market) to October 29. This is a month later than usual, a departure from Vector's normal practice and after the trust elections.
• Has spoken to media suggesting that Entrust intends to sell down its shares in Vector with the effect that dividends to beneficiaries would be reduced.
Cairns said there was no basis in fact for this suggestion and Entrust was concerned that these comments were made by Stiassny for the purpose of discrediting trustees.
"Let me be clear. Entrust's shares in Vector are not for sale and we are committed to the ongoing payment of dividends to the community, based on Vector's financial performance. End of story."
The original decision to not support Stiassny, after 16 years of service, was based on tenure, in accordance with the principles of good governance and made after seeking independent advice, said Cairns.
"Mr Stiassny's directorship expires every three years by rotation. No public company chair is a chair for life. Mr Stiassny as an experienced businessman, company director and chairman, should know this."
Entrust (formerly Auckland Energy Consumer Trust) is a private trust that owns the majority of Vector on behalf of its 331,000 beneficiaries.
It owns 75.4 per cent of shares in Vector, worth approximately $2.4 billion. The shares are held in trust for energy consumer beneficiaries in Auckland, Manukau, northern parts of Papakura and eastern Franklin who are paid a cash dividend of each year.
The 2018 dividend will be $350.