Revamped Vector: owners in control

By Mark Reynolds

Auckland power line business Vector - formerly a part of Mercury Energy - finally has a constitution that gives its main shareholders control of the boardroom.

Shareholders adopted the new constitution yesterday, giving each share an equal vote to appoint directors.

The major shareholder is the Auckland Energy Consumer Trust, an elected organisation that owns the company on behalf of two groups of beneficiaries who comprise customers on the Vector network and three local councils that will inherit the trust's assets in 2073.

The constitutional change, and the adoption of a new statement of corporate intent, goes a long way toward normalising what has been a bizarre governance structure since the company emerged from the Auckland Electric Power Board in 1992.

The Minister of Energy, Max Bradford, welcomed the revamp. His ministerial inquiry into last year's power crisis found that Mercury/Vector's governance structure was a possible contributing factor to the blackouts.

"I'm pleased that this has been worked out," Mr Bradford said. "This is what the inquiry panel suggested was needed ... there have obviously been some difficult negotiations to get here."

Consumer trust chairman Michael Barnett said the change "does a power of good in clarifying the company's ownership and aims."

Previously, the trust could appoint only four out of nine directors to the company; the majority of the board was essentially a self-perpetuating group.

Law firm Russell McVeagh McKenzie Bartleet had a role in the rubber-stamping process. The unusual structure was intended to be only until some of the company was privatised.

But various excuses, including the company's failed bid for rival Power New Zealand, meant those plans were put on hold.

The constitution will stay in place regardless of action in the High Court at Auckland this month.