Leak puts spotlight back on NZ Post

By FRANCESCA MOLD political reporter

New Zealand Post deputy chairman Syd Bradley blamed chief executive Elmar Toime for problems plaguing the state-owned company and wanted him out of the job, says a confidential board letter.

The letter, dated September last year, was written just weeks after ructions between Mr Bradley and board chairman Ross Armstrong had supposedly been smoothed over.

But its contents indicate the company was still in turmoil and suggest Mr Bradley was annoyed that Mr Toime had allegedly taken part in an attempt by Dr Armstrong to oust him because of allegations that he had leaked sensitive company information.

In the letter, Mr Bradley called for Mr Toime's contract not to be renewed.

"I do not now have the necessary trust and confidence in his (Mr Toime's) judgment and decision making for him to continue to lead the company for another full term," he said.

But just seven months after writing the letter, Mr Bradley claims his concerns have been resolved. He said yesterday there was no lingering tension between him and the chief executive and he had since supported a board decision to renew Mr Toime's contract.

Mr Bradley said he had come to a "better understanding" and was satisfied the issues he raised had been "clarified and addressed".

The letter, leaked to Opposition MPs Murray McCully and Rodney Hide, catalogued concerns about Mr Toime's management of a series of scandals that had caused bad publicity for the company.

The allegations suggested Mr Toime:

* Made untruthful statements about his potential salary which was reported by NZ Post to be less than $800,000 but alleged to be more than $1 million.

* Paid off two senior managers of NZ Post subsidiary Transend at a cost of $20,000 each.

* Took "unilateral" court action to gag Act leader Richard Prebble without first obtaining the authority of the board.

"This action called the public reputation of NZ Post and board members into question and demonstrated very poor judgment, that included poor advice to the chairman," said Mr Bradley in the letter.

* Failed to report problems with a South African contract to the board. "In the main, only good news and spin was being presented," said Mr Bradley.

* Knew the identities of managers who had been guaranteed anonymity if they gave evidence to a confidential inquiry into mismanagement.

Mr Toime was not talking to the media yesterday.

But the MPs who released the letter to the media seized on it as evidence that NZ Post heads had misled Parliament, citing contradictory statements made by Mr Bradley and Mr Toime.

They said it lifted the lid on a "cover-up" at NZ Post.

Parliament's privileges committee is already looking into allegations that Mr Toime and Dr Armstrong misled MPs by claiming they did not have a copy of a report into NZ Post's South African operations when it was later revealed they had a draft version.

Mr McCully and Mr Hide say the contradictory statements included Mr Bradley saying in his letter that two former Transend staff members had been "paid off" with $20,000 payments while Mr Toime told a select committee the employees were only paid in accordance with their contractual terms of employment.

The letter said Mr Toime knew the names of managers who gave evidence to an inquiry where anonymity was promised, but Mr Toime told the committee he did not know which staff had spoken to the lawyer heading the inquiry.

Mr Bradley alleged in his letter that Mr Toime had not properly sought approval of the board before seeking a court injunction against Mr Prebble, but Dr Armstrong has said approval was obtained.

"It's hard to see how the minister, chairman and chief executive can continue to hold their jobs after this," said Mr McCully.

Mr Hide said: "There has been a complete failure of governance by the board and minister on behalf of the taxpayer.

"No private-sector company would get away with this."

But Mr Bradley said he would not have continued as a NZ Post board member if he had not been satisfied the issues he was concerned about had been dealt with properly.

"In governance and management altercations, debate and disputes all take place," he said. "Unfortunately here they end up in the media out of context and out of timing."

He said he was distressed the letter had been leaked. "The biggest concern I have is that it brings our company into the public eye again at a time which it didn't deserve to."

Parliament's finance and expenditure committee is reviewing NZ Post's finances and has prepared a draft report due to be completed by MPs today. The report is due to be presented to Parliament on Monday.

A spokesman for State-Owned Enterprises Minister Mark Burton said Mr Bradley's letter detailed historical problems that had been resolved. Mr Burton was satisfied board members had put the past behind them and were now working well together.