Air NZ and the “national interest”

I shouldn’t be surprised that it is top business and political journalist Fran O’Sullivan who covers the near illegal orders the Government has given Air New Zealand.  So many journalists wouldn’t know about the Companies Act. Fran writes:

Air NZ – in which the Government holds a 76 per cent stake – is not a state-owned enterprise.

But Cabinet ministers … now seem to believe they can order the publicly listed company to uphold non-specified “national interest” considerations.

Under the Companies Act it is clear that majority shareholders do not and cannot direct the company. Air NZ directors have fiduciary duties to run the company in the best interests of all shareholders – not to suck to the majority shareholder who appoints them.

Air NZ shareholders deserve to know a lot more about the Government’s definition of “national interest” and how any strictures will affect shareholder value.

But the NZX should be issuing “please explains” all round, given the huge number of uncertainties now on the table.

No shareholder – even a fabled “plaintiff of convenience” – has yet emerged to tackle the Government’s blatant interference in Air NZ’s business for what are really political ends. But if the Government continues down this capricious path, other Air NZ shareholders will get stroppy.At issue is, if the minister had known of the charter would he have advised Air NZ not to proceed? If so, what ramifications would this have for the company’s revenue? Would this have been a breach of Air NZ’s requirement to make continuous disclosure to all shareholders? And what ramifications would it have for the interests of other shareholders?

These are all good questions.  Air NZ is obliged by law and NZX to treat all shareholders equally.  If any market sensitive information is shared with Dr Cullen in their monthly meetings, then Air New Zealand Directors may be in the gun.