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CAN THIS
MAN BE
TRUSTED?
READ HIS
OWN LETTERS
FOR SHOCKING
INSIGHTS S-G David Collins
Wellington: 25 August 2007
We do not want to say too much
about the new Solicitor General
David Collins. It is far better you
see what the chief law-
enforcement officer of our fine
country is like by reading his
own words (with subsequent
commentary of course).
LETTERS SHOWING DAVID
COLLINS TWICE COMMITTED
PERJURY (once in the High
Court and once in the Court of
Appeal - in different matters)
BLOCK BY THREAT OF DAVID
COLLINS (see www.kiwisfirst.
com)
NATIONAL COURT NEWS :
dateline: November 2006
Michael Stiassny is seeking the
shelter of the New Zealand
Courts yet again for his role in
what is being recognized as the
largest tax scam in New
Zealand history, the $1.7 Billion
CWF forestry tax dodge.
The Inland Revenue
Department shut the tax dodge
down after nearly four years of
operation and ordered the
parties to pay back the taxes, as
well as millions of dollars in
penalties. The tax dodge
vehicle, CWF Holdings Ltd, was
then cast off into liquidation by
the perpetrators. The appoint-
ment of the liquidators by
Stiassny and others was
subsequently challenged in the
High Court at Auckland by Trinity
Foundation Limited, a charitable
foundation administered by the
Anglican Church that was used
by Auckland Solicitors Bradbury
& Muir as the cover for the tax
avoidance scheme. Trinity
claims not to have been paid in
excess of $12 million owed it by
CanWest, the local division of
the Canadian Media
conglomerate. Stiassny and
Grant Graham are alleged to
have breached their duties to
the company and engaged in a
breach of trust by acting
minimally in a de facto fiduciary
arrangement with CanWest.
In an appeal brought by Trinity,
and heard by the Court of
Appeal on 18 September 2006,
Trinity counsel Bruce Stewart
QC sought the right to pursue
Stiassny individually for his key
role in the failed tax scam,
noting that the current
liquidators are unlikely to do so
as they are beholden to
Stiassny and certain others
involved. As of this printing, no
ruling has yet come down from
the Court of Appeal. The IRD
has not legally prosecuted
those involved in the scheme.
Anonymity was granted as part
of a settlement reached.
Two of the three judges
considering the Trinity appeal,
namely Court of Appeal
President William Young and
Justice Terence Arnold, are at
the same time considering an
appeal on the papers for a stay
of a High Court costs ruling that
Stiassny secured against
Auckland businessman Vince
Siemer for an alleged violation
of a High Court injunction, an
injunction that Stiassny has
claimed prevents Mr. Siemer
from revealing information
regarding other dubious
accounting schemes that Mr.
Stiassny has been involved in.
In order to obtain the injunction,
Mr. Stiassny submitted an
affidavit to the Auckland High
Court on 8 April 2005 wherein
he swore that none of the
allegations Mr. Siemer had
made about him on the www.
stiassny.org website were true.
Stiassny then filed a $1.25
million defamation suit against
Mr. Siemer on 12 April 2005, as
he was required to do in
exchange for obtaining the ex-
parte injunction against Siemer,
but he has repeatedly failed to
advance his case against Mr.
Siemer since obtaining the
injunction. On 6 October 2006,
Stiassny failed to comply with a
court imposed deadline that he
provide discovery in that case.
These matters are part of a
firestorm of controversy currently
surrounding Mr. Stiassny. Last
week, Stiassny refused to allow
media cameras into the Vector
Limited AGM held in Auckland.
The very next day Stiassny was
the catalyst for a raucous revolt
that disrupted the Auckland
Energy Consumers Trust AGM
and required the unsuccessful
intervention of security
personnel. Those who did not
realise Stiassny was in the
room had their attention
directed to the man wearing the
dark business suit and the
'Dumb-and-Dumber' haircut
sitting to one side of the room.
Stiassny was then whisked
from the building by Vector
staffers.
The AECT was the 100% owner
of Vector Limited until Chairman
Stiassny led a 24.9% sell-off in
the form of a public share
offering on the NZX exchange in
August 2005. The need to pay
down Vector’s ballooning $3.15
Billion debt – in part a result of
its contentious acquisition of
NGC the year before – was cited
at the time as a primary reason
why the public equity float was
necessary. Yet only 2% of the
debt was ultimately paid down
after the successful 25% share
float.
Mr. Stiassny has been publicly
claiming he grew Vector from a
$1 Billion company to a $5
Billion company in 3 years. At
the Auckland Consumers Trust
AGM much of the controversy
was directed at Vector’s claim
that assets had appreciated
17.9% in the last fiscal year and
that nearly $1.7 billion (or 30%)
of Vector’s current valuation was
in the form of “goodwill”. As a
comparison, Vector’s valuation
of its goodwill is now roughly
equivalent to the goodwill of the
Coca-Cola Companies at
US$1.2 Billion.
Local News: 26/7/06
Auckland judge prevents
the Auckland Coroner from
releasing his findings into
Robert Fardell QC's
suicide. The public were
again denied the right to know
the full circumstances
surrounding prominent
barrister Robert Fardell QC's
fatal fall from the 12 metre
high Takapuna Head cliffs on
11 December 2005 when an
Auckland judge ruled the
Auckland Coroner was
prevented from releasing his
findings until judicial review
proceedings are conducted.
This action follows months of
cover-up, where the last
person to see the defendant
alive (lawyer Christopher
Morris) refused to grant the
police an interview and the
family hired prominent
barrister Harry Waalkens QC
to cover up the suicide and
ensure the public inquest was
conducted in secret
(28/2/06).
Years of cronyism have
created a siege mentality that
pervades the Auckland
judiciary. Concerns are
rampant as to what secrets
Fardell may have wanted to
get off his chest before he fell
to his death and what damage
this may cause to the vested
interests within the provincial
and secretive court.
Several lawyers contacted
expressed grave concern that
there was no oversight or
accountability of judges and
this was yet another example
where the Court put the
protection of one of their own
before the public good and
interest. One called it "ugly"
and another said that it
demonstrates that the Court
operates first and foremost to
protect its favoured members.
Related News Links:
How MICHAEL STIASSNY
sold out his friend
Robert Fardell shortly
before he died. READ
MORE
Archive 22-6-06
Secret inquest into
death of Robert Fardell
exposed - In a dramatic
turnaround to initial
reports, the Auckland
Coroner, Murray Jamieson,
today was forced to
concede Robert Fardell QC
did not drown on 11 Dec.
2005 while swimming but
instead suffered massive
injuries from a fall before
drowning. This ruling came
almost 4 months after an
attempt by the Coroner's
office to conduct the initial
public inquest (held on 28
February 2006) in secret,
in contravention of the
Coroner's Act 1988 that
required public notification.
Despite the body being
found on rocks at the base
of Takapuna Head cliffs on
Auckland's North Shore,
and no suspicions of
homicide, the Coroner did
not suggest death was a
suicide. Prior to this ruling,
Fardell family lawyer Harry
Waalken QC had
attempted unsuccessfully to
suppress all the inquest
evidence, arguing further
that the death could be
accidental and that the
Coroner had no standing to
suggest to the contrary.
This position ignored Mr.
Fardell having had to
breach a fence to reach the
cliff edge. Fardell was 52
years old when he died.
OUR COMMITMENT
TO ACCURACY: This
website is a public
service, dedicated to
providing information
and transparency
regarding activities
affecting Kiwis that are
not being accurately
reported elsewhere.
Where any specific
information on this
website is questioned
and supported as
inaccurate it is either
pulled off the site
immediately or space is
allowed for a qualified
response, prominently
placed on this site.
Anyone may report
errors or omissions
contained on this site via
the Contact link.
Submissions will be
promptly acknowledged,
examined for accuracy
and, if approved, will be
immediately changed or
added.
- Vince Siemer, MBA,
editor
THE FACE BEHIND NEW ZEALAND'S SKYROCKETING POWER
BILLS
17 August 2009
Power rates have increased an astronomical 80% since Michael Stiassny took over as Chairman of Vector Energy
seven years ago. During this short time, Stiassny's own compensation doubled and it is reported he additionally
received loan kickbacks on high risk bridge financial products he took advantage of in his early days to bring huge
amounts of debt upon the company. This occurred during the disastrous growth and acquisition phrase promoted
by Stiassny with the help of his girlfriend Karen Sherry, an Auckland Energy Consumer Trustee and current board
member of Vector. This, in turn, forced Vector to sell off its most prized asset (the Auckland to Wellington lines) to
Chinese interests last year simply to keep from having their credit rating downgraded. Such a credit downgrading
would have likely resulted in much of Vector's debt being called due, as well as certain interest rate increases on
its massive debt.
As a monopoly provider of power to Auckland and Wellington, the huge costs of these blunders by the Board of
Vector Limited had to be paid for by the unwitting consumer. It is safe to say that electricity rates have increased at
twice the rate they would have if Stiassny had not rose to a position of power and pushed such a misguided
strategy of acquisition and amassing huge debt on the company.
Ms Sherry has the personally distinction of being sacked from the energy board after the massive power outages in
Auckland in 1999 were determined to be caused by neglect by the leadership.
The New Zealand government last week revealed the result of their own investigation that New Zealanders are
paying far more for power than they ought to be. The government did not reveal that this was largely due to the
gross mismangement of Vector by Mr Stiassny. Mr Stiassny put this once financially sound government owned
enterprise into such financial straits that, even with the sell off of his most valuable asset, the company's financial
position is still in poorer condition than when Stiassny took over the Chairmanship with the help of a few banker
friends who like his propensity to borrow money.
In 2005, Michael Stiassny was giving powerpoint presentations around the Country which falsely showed he had
increased the value of Vector from a $1 billion company to a $5 billion company in three years. The deception was
on the scale used by Enron executives leading up to its infamous collapse.
In 2006, Mr Stiassny went on a public relations blitz viciously attacking Commerce Commissioner Paula Rebstock
for not allowing monopoly electricity provider Vector to raise its rates to its captive consumers in Auckland and
Wellington as much as it said it needed to survive. In a defeat of consumer protections, Vector prevailed when it
became obvious that Stiassny had created a financial mess of the company that could not be solved without a
public bailout.
As a result of its investigation and findings, the government has promised to implement steps to lower power bills
for consumers and resolve the persistent problem of power black-outs and brown-outs. We will see.
NZ RACING BOARD LATEST CASUALTY OF STIASSNY'S TOUCH
12 February 2009
Michael Stiassny was appointed Chairman of the New Zealand Racing Board in January 2007 by then
Government Racing Minister Winston Peters. Within weeks, Stiassny's Insolvency firm Ferrier Hodgson (now
Korda Mentha) was granted a long term consulting contract by the Racing Board.
A year later, www.kiwisfirst.co.nz editor Vince Siemer filed an Official Information Act request with Racing Board
CEO Graeme Hansen, seeking information on this 'consulting' contract. This contract was in addition to the
$57,500 the government body paid Stiassny for the 9 meetings he attended as Chairman and the 10
subcommittee meetings he sat in on.
Mr Hansen responded with a copy of the 'consulting report' from Stiassny's firm, missing page 13. Hansen
refused further inquiry as to whether this omission was intentional. He also refused to divulge how much
Stiassny's firm was paid for this report - a 23 page "outline" in landscape format. The entire report looked like a
homework assignment by a University student. Not surprising, as it turned out. It was revealed that a low level
staffer no longer with Stiassny's firm put it together. Several pages had fewer than a few dozen words on the page.
The outline very basically laid out the racing facilities of the 'Northern Region' in New Zealand with its 'discussion'
recommendation that the Avondale race course be phased out in favour of greater development of the Pukekohe
course.
Another year on, the Racing Board is in financial turmoil. Turnover at the yearling sales in January was down 33%
and betting revenue on thoroughbred racing in New Zealand is down 7.9%. The Annual Report is out and it
appears Stiassny's firm was paid $95,000 for the outline report. An insider has advised that the inquiries as to
how much Stiassny was being paid for consulting has curtailed further consulting pay outs to his firm, at least until
the heat cools.
The 2008 Annual Report reveals another disturbing hallmark of Stiassny's stewardship; furtive accounting. Few
remember it was only 3 years ago that Stiassny - as Chairman of local lines company Vector Limited - was on the
lecture circuit telling NZ businessmen that he had grown Vector from "A $1 Billion company into a $5 Billion
company in 3 years". Anyone reading the Vector financial statement could see at the time that it was a fabrication.
The contrived valuation was achieved through an inflated value for recently acquired subsidiary NGC, a hugely
amassed debt and almost $1.8 Billion in 'goodwill' alone. It was only when the company was forced to sell a
primary infrastructure (Wellington to Auckland lines) last year that few people noticed. The sale of what many
considered Vector's prized asset was borne of the 'innovative' debt structure imposed on the company by Stiassny.
In the case of the New Zealand Racing Board, the 2008 Annual Report now states of its financial investments "The
New Zealand Racing Board has some concentration of credit risk with New Zealand Banking Institutions. To
minimise this risk, the New Zealand Racing Board’s policy is to hold investments with Financial institutions
with an adequate Standard & Poors rating".
This is a notable regression from the 2007 Annual Report which stated - "The New Zealand Racing Board’s
policy is to hold investments with institutions that have a Standard & Poor’s short term credit rating of not less
than A1+. Long Term investments require a Standard & Poor’s long term credit rating of not less than AA-."
A forensic accountant interviewed for this story openly wondered what it would take for the public to wake up to
Stiassny's lack of business acumen. "He is, by most accounts, a very good and successful insolvency practitioner.
But it is not only a different skillset required to run a productive enterprise, it is a completely different mindset. A
liquidator is focused on the piecemeal sale of the business assets."
Judge Mark Cooper’s Racist Invective Obscures Michael Stiassny’
s Control of Auckland Court
21 January 2009
Under cover of the Christmas Holiday, Auckland High Court Judge Mark Cooper
(right) ruled www.kiwisfirst.co.nz editor Vince Siemer had defamed Auckland
insolvency accountant Michael Stiassny with publications on this website.
Siemer was ordered to pay $920,000 damages, plus unspecified Court costs, to
Mr Stiassny. Mr Siemer was debarred from defending himself at the ‘trial’ by order of
Auckland High Court Judge Judith Potter for refusing to pay Stiassny $200,000 in pre-trial
costs ahead of trial.
A jury trial had earlier been denied Mr Siemer by Rodney Hansen J on Mr Stiassny’s application that the nature of
the defamation alleged was too complicated for a New Zealand jury to understand.
It is understood that Stiassny and an employee of Korda Mentha (formerly Ferrier Hodgson) Alan Garrett, walked
into an Auckland Courtroom sometime in October and told Judge Cooper the sad story of Stiassny having to tell his
children that he did not do any of the things which had been evidentially detailed on this site. Testifying his side of
this bizarre legal escapade lasting over 3 ½ years, Mr Stiassny told the Judge he had spent over a million dollars in
legal costs pursuing Mr Siemer and that everything Siemer published about him were lies which had been
previously investigated by the Serious Fraud Office and Institute of Chartered Accountants and found to be
baseless. The implausibility of the testimony was not challenged by the Judge. No reporters or public were
present at this cosy meeting. No record other than the testimony was apparently taken.
The undefended trial was the first time in the long court battle that Michael Stiassny had appeared in Court. His
appearance came after the Judge provided assurances that he would not be cross-examined on his testimony.
The “official” summary of the events and trial lies in the often acerbic words of Justice Cooper contained in his
judgment dated 23 December 2008 which demonstrates how serious the Judge considered the defamation to be.
In paragraph [49] of that judgment Cooper quoted what he later referred to as “clear instances of vile racist abuse
[by Mr Siemer]”. In an apparent quote of Mr Siemer, Cooper J stated –
“Mr Siemer had referred to Mr Stiassny as a man with “exceptional sway within the small Jewish community” and
had commented that “when the judiciary determines that a ruthless and powerful man’s reputation is so
priceless…the Gestapo cannot be far behind…people like Adolph [sic] Hitler….”.
The big problem is that Mr Siemer made no such racist remarks. Justice Cooper simply took words from
unrelated articles, juxtaposed them, then attributed the resultant fictitious quote to Mr Siemer. Those articles
remain in their unaltered state on the “interviews” page of this website.
In one article which tracks Michael Stiassny’s questionable relationship with Robert Fardell QC prior to Mr Fardell’s
suicide in December 2005, Mr Siemer actual wrote “Stiassny, the man (Fardell) had inextricably linked himself
with, a man with exceptional sway within the small Jewish community and certain sectors of the business
community, had spurned his pleas for help.”
An unrelated interview posted on the site had Mr Siemer answering the question “Can you really argue with Judge
(France’s) decision that one cannot put a price on Stiassny’s reputation whereas the only thing you have lost is
your expenditures on the billboard and website?” To which Mr Siemer answered:
“Are you kidding?! The hearing was the same week as Anzac Day. Those gallant men and women who paid the
ultimate price for freedom would roll over in their graves to learn that a High Court Judge played truth police while
quashing freedom of expression. When the Judiciary determines that a ruthless and powerful man’s reputation is
so priceless that any evidence and experiences that he claims undermines it must be purged and banned, the
Gestapo cannot be far behind. I am not being over-dramatic. Erosion of civil liberties is notoriously unremarkable
as it is occurring. If history has taught us anything it is that people like Adolph Hitler, Idi Amin, Saddam Hussein
and Pol Pot succeeded in committing horrendous crimes only through purges of public opinion that conflicted with
the reputation they sought to promote.”
Judge Cooper’s “quote”, which he attempted to attribute to Mr Siemer, is compiled from the words highlighted in
the actual publications (above). Perhaps more than anything else, this example demonstrates the dangerous
threat to justice and the rule of law posed by the lack of judicial accountability in New Zealand.At least three of
Stiassny’s former lawyers – Patricia Courtney J, Rhys Harrison J, and Paul Heath J – are active judges on the
Auckland High Court. All three Judges played critical roles in the lead up to the defamation ruling of Cooper J.
Four witnesses provided evidence that Patricia Courtney helped Stiassny conceal company assets of Paragon Oil
Systems Limited (of which Mr Siemer and his wife were both shareholders and directors) nine months after
Stiassny signed a compromise agreement representing the return of these assets, in May 2002. This was prior to
Ms Courtney's appointment to Auckland High Court judge.
Shortly after being appointed an Auckland High Court judge in 2005,Paul Heath J presided over a secretly lodged
appeal which resulted in an order to suppress the Auckland Coroner’s findings into the suspicious death of Robert
Fardell QC on 11 December 2005. Stiassny was the trustee of the Fardell multi-million dollar family trust (Dellfar
Holdings Ltd) at the time of Fardell’s fatal fall from the 15 metre high Narrow Neck cliff. Mr Siemer’s million dollar
professional negligence suit was specifically cited in appeal documents as the reason suppression orders were
being sought. Despite this, Mr Siemer was never notified of the proceedings.
The Judge directed the Fardell estate plaintiff, Auckland Coroner and Attorney General defendant each be
obscurely named on Court documents as “A”. This concealed the Court appeal proceedings from public and
press. Neither the Attorney General nor the Coroner were represented at the secret appeal proceeding. Heath J
permanently sealed the Court file of the entire proceedings after ordering the Coroner’s public findings
suppressed and sealed. Heath's Court order was not publicly released until six months later (June 2007),
ensuring the statute of limitations for any appeal to his suppression order had elapsed.
As recently as March 2008, Rhys Harrision J ordered a Court case dismissed which evidentially laid out a prima
facie case of fraud by Stiassny. He then ordered that court file sealed, notably failing to mention in his order that
any evidence had been presented to the Court, including strong evidence Stiassny’s fraud upon the Court was
occurring with the complicity of some Judges.
Two other Judges from the parochial Auckland Court believed to have past associations with Stiassny – namely
Graham Lang J and Rodney Hansen J – actively engaged in assisting the powerful and litigious insolvency
practitioner from the Bench. Former insolvency lawyer Graham Lang J exempted Mr Stiassny from discovery
obligations. Rodney Hansen J ordered Mr Siemer to pay Stiassny’s legal costs in a successful application by
Siemer’s lawyer Brian Henry in September 2006.
Months later, Rodney Hansen quietly and inexplicably reversed his findings on the merits of Siemer’s defence to
agree with Stiassny that Mr Siemer’s defence must be restricted to the subject of the compromise agreement he
had signed with Stiassny in August 2001. In that agreement Siemer agreed not to speak about Stiassny’s
misconduct in relation to Paragon Oil Systems in return for Stiassny returning company assets. Stiassny had
claimed lien rights to the assets for unsupported fees.
Hansen J was the original trial judge but was replaced by Mark Cooper J without notice or explanation. At the time
of the ‘trial’ before Cooper J, Hansen J’s ruling was the subject of an active appeal application before the New
Zealand Supreme Court (SC62/2008 Siemer v Stiassny). This Supreme Court application was subsequently
dismissed without hearing on 19 November 2008. In dismissing the application, Justices Blanchard, McGrath and
Tipping for the Supreme Court ruled that conflict of interest by Hammond J in dismissing the appeal to the Court of
Appeal “could never have been responsibly alleged”. Since this ruling, a Special Leave application to the New
Zealand Supreme Court has been filed, with documents appended which prove the Supreme Court was materially
misled by Hammond J on the issue of his conflict of interest and, moreover, that Judge Hammond is a material
witness to Stiassny’s accounting misrepresentations in relation to Paragon in early 2001.
In April 2005, Siemer reported on this website – with evidential detail using Stiassny own documents – accounting
scams which he considered Mr Stiassny widely used in his accounting practice. This included proof that Mr
Stiassny wrongly labeled Mr Siemer’s own company insolvent in March 2001 and had attempted to overcharge
$10,000+ in fees. Stiassny was unable to collect the fee overcharge because Siemer refused to co-endorse the
cheque. Two weeks later, Stiassny backed down, claiming he made an ‘error’ on his billing.
This was the end of the matter until Siemer noticed in a New Zealand Herald Article in late 2004 that Michael
Stiassny was charging roughly $100,000 a month in fees over seven months for liquidating Access Brokerage Ltd
– with no end in sight. At the time Siemer expressed considerable sympathy for the vast numbers of honest Kiwis
who had superannuation invested in Access Brokerage but who were powerless to stop Stiassny’s fee gouging.
Like Siemer’s own company years earlier, the Access liquidation was unique by virtue of its substantial cash
assets which were not encumbered by debenture. New Zealand law gives virtually no rights to shareholders or
beneficiaries against receivers or liquidators. Perversely, insolvency practitioners are granted liberal use of the
shareholder assets to finance defence against any legal challenges from aggrieved shareholders.
Siemer then put up two large billboards in the Auckland CBD directing people to this website, which included the
scanned documents Mr Siemer had earlier presented to the Serious Fraud Office regarding Mr Stiassny’s suspect
practices. The Serious Fraud Office declined to prosecute the matter, claiming the alleged fraud was not of
significant public interest and failed to meet the half million dollar threshold.
Vector Limited in Struggle over Massive Debt Brought on by Stiassny.
25 March 2008
Embattled Chairman Michael Stiassny looks for help from his mates in government to cover up his
mismanagement of electricity and gas provider Vector Limited. See www.vectorlimited.co.nz
THE NEW ZEALAND ATTORNEY GENERAL NAMED AS DEFENDANT IN
STIASSNY CORRUPTION ACTION
10 January 2008
In a move that has resulted in New Zealand Judges' demanding the Auckland High Court Registrar find a way to
reject a court action that exposes serious Court corruption so a judge will not have to, High Court Registrar Tony
Mortimer attempt to follow the order by replying a day after filing "I have now had the chance to further peruse
your 9 January statement of claim, and I find I am unable to determine that the document meets the
requirements of rule 108." Brilliant. The Registrar has said that he is unable to find fault but still 'suspects' the
filings may not meet rule 108. Rule 108 states the claim must provide sufficient information to be answerable.
Read for yourself why case CIV2008 404 0104 is writing a new chapter in exposing judicial corruption of the 'old-
boys' system. Videotape of Registrar Tony Mortimer acting unlawfully coming to YOUTUBE soon.
READ COURT FILINGS
VECTOR AGM A LESSON IN CORPORATE TERRORISM
20 October 2007
Amid hired security forces that rivaled that of a traveling head of state, Vector Chairman Michael Stiassny
threatened looming electricity infrastructure cutbacks and looked to blame Vector’s lackluster business
performance and its huge and mounting debt on government regulators during the company’s annual general
meeting yesterday. About three hundred people attended the gathering held at Ellerslie Event Centre. At least two
shareholders were prevented from attending by Russell McVeagh solicitor Michael Heron who said he had orders
from the board of directors to instruct security staff to prohibit these shareholders from entering.
In a scene reminiscent of Jonestown (the former Jim Jones sect compound in Guyana infamous for murder and
mass suicide) the Chairman commenced the meeting by pointing out all the exits before launching into claims that
the company was under siege from the Commerce Commission. Security guards stood ominously at the doors
as he spoke. Cameras were not allowed in. He wasted no time telling shareholders that this regulatory
environment singularly threatened their investments. In a salvo fired at consumers he warned the company’s
future investment into electricity and gas supply infrastructure was also at risk. Both Stiassny and Acting CEO
Simon McKenzie stressed the uncertainty and unpredictability of the regulators as the true source of Vector’s
financial woes.
Vector’s financial troubles are no small problem, not simply for the investors but also the regional consumers who
have seen the company’s debt skyrocket over the last few years to a current $3.127 billion – up $46 million from
last year despite selling off nominal assets. In order to maintain the dividend payment to shareholders this year,
retained earnings went into negative territory. The monopoly utility also has $1.6 billion in goodwill that it has been
unable to significantly write down due to its perilous financial position. This overall financial scenario is now being
used to pressure the regulators into letting Vector charge power consumers more than the Commerce
Commission has said they are entitled to do.
Two years ago Stiassny was proudly telling public meetings that he was responsible for a half billion dollar
unrealized capital gain on the acquisition of NGC by Vector. If true, Vector could sure stand to capitalize on this
gain now. However, as with much that comes from Stiassny, this was part arrogant bluster and part accounting
parlor tricks serving to pass as accepted fact. Nevertheless, the real story is the substantial debt that the company
took on board at the time of this purchase and which it now is struggling to discharge. The company has recently
looked hard at selling off assets to get its debt ratios down to reasonable levels and its precarious BBB+ (with
negative outlook) credit rating up.
Although the investors were generally unhappy, the Chairman and acting CEO were reasonably successful in
diverting attention away from Vector’s recent management chaos. Three directors resigned en masse within the
last year and both the Chief Executive Officer and Chief Financial Officer abruptly resigned five months ago.
Director Karen Sherry, a lawyer and political appointee with little business experience had been put in charge of
risk assessment for Vector in the midst of this drama.
Vince Siemer was one shareholder unlawfully prevented access to the meeting. Stiassny filed a $1.25 million
defamation claim against Siemer two and a half years ago but has done virtually nothing to advance the matter
since. In July of this year – when Siemer was on a two week trip overseas – Stiassny was able to get a High Court
order from Justice Judith Potter that debarred Siemer from defending his defamation claim. This issue is now
before the Court of Appeal. For two months the Court of Appeal has failed to schedule a hearing citing the large
number of appeals Siemer has filed as one reason for the delay. Potter was deeply involved with the Electricity
Commission before her appointment as judge and has openly defended Stiassny in court. Three of Stiassny’s
former lawyers now sit as High Court judges. The judge that granted Stiassny his injunction against Siemer is a
former chambers’ partner of Stiassny’s current lawyer Julian Miles QC.
Siemer, who has a bachelors degree in industrial relations and an MBA from Washington University in the United
States and has run successful companies abroad, wanted to ask the directors questions regarding the goodwill,
debt covenants and foreign currency risks. In being denied entry into the meeting, Siemer drew a parallel with
attempts to silence critics of ENRON ten years ago. He considers it is no accident that no one on the Board other
than Chairman Stiassny has comprehensive accounting or finance experience and has made a written request of
each director asking them whether they personally agree with the company’s current financial statements. Siemer
views the recent move to appoint Hugh Fletcher (husband of the Chief Justice of the Supreme Court) a director of
Vector is little more than a political pressure move. Hugh Fletcher’s own business background, while extensive, is
uninspiring. Excluding Stiassny, the current directors of this $4 billion dollar essential service provider average
less than a year on the board.
FREE SPEECH CASE THROWN OUT BY NEW ZEALAND SUPREME
COURT
Wellington, New Zealand 21 August 2007
In a move that confirms New Zealand has taken its justice system to the dark ages with the formation of a
Supreme Court two years ago, Justices Tipping and McGrath - speaking for New Zealand's Highest Court - refused
to hear an appeal where High Court Judge Judy Potter ordered the editor of www.stiassny.org sentenced to six
weeks in the notorious Mr. Eden maximum security prison for merely publishing this site. The official charge
imposed by Judy Potter was "conspiracy to defeat the cause of justice" which seemed Freudian given Ms. Potter's
refusal to allow accurate recording of the proceedings, her disallowing cross examination of witnesses against the
accused, conducting part of the proceedings outside the presence of the accused and his lawyer, making multiple
findings of 'beyond reasonable doubt' based on untested hearsay evidence and refusing to recuse herself where
both the accused and his lawyer had formal complaints pending of judicial misconduct against this judge - on
separate matters - including ruling on behalf of her brother-in-law in a case without disclosing her relationship to
her brother-in law litigant.
The NZ press is largely forbidden from publishing stories of judicial misconduct and, where they do, the suspect
judges are granted name suppression. Tony Stickley with the New Zealand Herald informed the editor of Kiwisfirst
that even when the Herald is correct in its reporting, the Court awards a hundred thousand dollars in costs against
them that they cannot afford.
Fundamental law violations by judges have become commonplace since New Zealand abolished the Privy Council
in England as an impartial appeal Court in favour of the newly formed 'Supreme Court' in 2004. At the time there
was widespread concern among New Zealand's lawyers that such a move would promulgate up the ladder the
'old-boy's network' favours that had made a cesspool of established law in the lower courts. Key lawyers
accurately pointed out the tremendous number of NZ Court cases that had been overturned as proof that the Privy
Council was needed to instil discipline in a judiciary that had become corrupted by special interests. This concern
was validated by New Zealand's closest ally when, shortly after the Supreme Court was formed in 2005, Australia
refused to extradite two defrocked priests to stand trial in New Zealand, saying flatly this refusal was because they
were unlikely to get a fair trial here. Two months ago the Privy Council issued its last New Zealand Case ruling,
overturning the conviction of David Bain for murder due to fundamental failures by the New Zealand Courts in
following due process procedures. When Kiwis generally are respected the world over for their ingenuity and
honestly, this embarrassment is a tremendous blow to national prestige.
Since the abolishment of the Privy Council as an independent judiciary, New Zealand has lost considerable status
among law-respecting democracies. Economically, many international businesses (sensing the legal risks) have
shunned having operations in New Zealand. A large number of New Zealand companies have quietly moved their
operations offshore. Most Kiwis point to the new Chief Justice Sian Elias' husband Hugh Fletcher being one of
New Zealand's most connected businessmen as proof that an impartial Supreme Court is an impossibility in, at
least, commercial cases. Even this damning indictment neglects the greatest threat to natural justice imposed by
its formation. For example, it is doubtful that the two Justices rejecting freedom of expression in this case would
pass muster for appointments in any other country. Euphemistically called 'constructionists' Justice Tipping and
McGrath have both worked to create their personal brand of English law in the South Pacific, only to take the
Country on a wild ride in the process. Three years ago, Justice Tipping unsuccessfully tried to create a new tort
(the Hosking case) that would make it illegal to take photographs of people in public. As a Court of Appeal judge,
McGrath gave vitriolic speeches about how lawyers needed immunity from negligence lawsuits by their clients.
Fortunately, his was an isolated voice, but the telling part is that he was the member of that court to be appointed to
the New Supreme Court.
In rejecting the appeal, the Supreme Court said the trial judge legally used her discretion. On the underlying issue
of Freedom of Expression and the Court of Appeal's refusal to consider this legal guarantee despite certain legal
precedent that they must, Justices Tipping and McGrath cited their own discretion to have the Supreme Court not
consider this thorny issue.
The editor of this website has vowed to fight on and has lodged a complaint on his imprisonment with Amnesty
International and the United Nations Council on Human Rights.##
14 April 2007
WHY IS THIS MAN'S NOSE GROWING?
In April 2005, Michael Stiassny was a desperate man. Sure, he
was pulling down $7 million dollars plus a year from his insolvency
practice and another $1 million dollars or so a year from his various
directorships, but the house of cards that provided this substantial
booty was about to collapse. He was about to be publicly exposed
for falsely labelling a company insolvent in order to personally steal
its technology and walk away with its substantial cash accounts.
Moreover, this single case would expose the systematic and
insidious way he has been able to achieve such a staggering personal
income. Mr. Sitassny's ignominious conduct in the debacle he created
with Paragon Oil Systems Limited - which in turn provided a blueprint
of how he was able to financially bilk other companies - was coming
back to haunt the once venerated insolvency practitioner due to
two billboards being put up in Auckland and a website being launched
that both detailed and proved his malfeasance.
With so much at stake, Stiassny had to act quickly. He hired top lawyer Julian Miles QC, chairman of
Shortland Chambers (where many of the current judges on the Auckland Court hail from), to obtain an
injunction shutting down the website and billboards. Paying Mr. Miles $900 per hour (not an exaggeration;
actually $900.00/hr) was not enough though. Stiassny was required to state in a sworn affidavit that the
allegations on the website against him were untrue, this in order to enable Mr. Miles to work his magic with
his fellow judges. Stiassny's already large nose grew a little longer.
For a time, this strategy worked. Mr. Miles was able to get then High Court justice Ellen France to issue an
injunction that decreed there was no reasonable defence of truth to allegations against Staissny despite the
incontrovertible evidence of Staissny's guilt, ordering that the billboards and website must be shut down to
protect Mr. Stiassny's reputation. For her role in covering up this corruption that affects every New
Zealander, Justice France was properly rewarded. But to be fair to the judge, she also honestly thought that
would be the end of the matter and that her judicial transgressions were justified because she was preventing
what could very well result in a catastrophic blow to the financial markets. Certainly, she rationalized, Mr.
Stiassny's seemingly criminal malfeasance did not extend to public utility Vector Limited, the monopoly
electric utility of which Stiassny was chairman and which also was at the time deeply involved in a complex
and expensive acquisition and public share float. Better, she thought, that a private word be taken up with
Stiassny to ensure this was not the case. Hence, Stiassny had to lie again and, like Pinocchio, his nose grew a
little longer.
No doubt this is where Judge France's inexperience (on the bench one year) and immaturity showed. Before
her judicial appointment Ellen France had never been anything other than a political bureaucrat. She was too
trusting - some would correctly say intimidated - by the likes of Mr. Stiassny and Mr. Miles and she wanted
to believe that operating outside the law in this case was justified. But once having made her decision, it was
not a case of misinterpretation of law or facts that regularly can be expected to resolve itself in the higher
courts. What Ellen France did was a clear breach of her judicial oath and her judicial colleagues knew full
well that risk of her abuse of power being exposed posed a huge dilemma for the Court as a whole. She
needed to be personally protected from what clearly was a lapse in personal character.
The next stage in the legal challenge was quite different. At the Court of Appeal, the case fell into the lap of a
close personal associate of Stiassny, Justice Robert Chambers. Chambers, a much more intellectual judge,
albeit corrupt, saw immediately that Justice France's decision was untenable. He needed to re-write history in
order to protect both the judge and his mate. And what Chambers did was pure genius. He refused to
overturn France's decision and even refused to address the validity of the points of appeal, choosing instead to
say the matter was a contractual dispute that singularly warranted dismissal of the appeal and maintaining of
the injunction. But Chambers J had a further problem. The course he embarked on contrasted with the Ellen
France judgment and was not a legal point cross-appealed. Consequently, Justice Chambers audaciously
wrote that by ruling this way he was merely agreeing with what Justice France thought - despite the fact that
Justice France's judgment said the opposite on this point. And this is when all hell broke loose in the Court.
Now both Justice Chambers and Justice France had crossed the line. What happened next is a testament to
the reality that judges, with few exceptions, are lawyers with a past: lawyers who are additionally not given to
allowing the skeletons of their fellow judges being exposed when it could very well lead to their own skeletons
being exposed. This is a particular risk and concern in the cloistered Court setting where it is common
knowledge among judges what the others had for lunch, let alone what bribe they took in 1988. It is against
this backdrop that the President of the Court of Appeal, Willy Young, a lawyer with his own sordid past,
became intimately and irreversibly involved. see related story It is not that Will Young is incapable of being a
decent and honest judge so much as the fact that his own history now prevents him from preaching morals to
the judges he now oversees. The reality is that they would simply laugh at his hypocrisy. A court insider has
revealed that it is his immoral vulnerability that was instrumental in Willy Young's appointment as President of
the Court in 2006. In the democracy of the corporate world, leaders are often chosen for their inability to
wield too much power. So it was with Will Young.
There is no particular fondness between Will Young and Robert Chambers, but their fates were by now
inexplicably linked. In an appeal on 8 February 2007, Will Young presided over another legal challenge that
not only laid bare the deceptions of Robert Chambers and the breaches by Ellen France but, perhaps more
importantly, revealed incontrovertible evidence that Mr. Stiassny lied under oath when he swore an affidavit
that, among other things, said he never labelled Paragon insolvent and had inadvertently invoiced Paragon
some $11,000 in fees that should have been charged to "Paramount". One problem, as it turned out, was that
Stiassny never did any work for a company called "Paramount", leaving the obvious inferences that his
attempt at fee overcharging was deliberate and criminal, and the attempted cover-up was not working as
planned. Another lie, and Stiassny's nose grew longer still.
On 4 April 2007, President Will Young of the New Zealand Court of Appeal ruled that despite all this evidence,
despite the unchallenged evidence of 9 witnesses who attested to judicial impropriety that included conducting
court proceedings ex-parte and the oppression of witness cross-examination, and despite irrefutable evidence
that the injunction was improperly obtained and issued, he saw no basis for the Court to take action. In doing
so, Justice Young may have protected Stiassny and his fellow judges but it is too early to tell whether, and to
what extent, his actions have harmed the Court's reputation and New Zealand as a whole. In the meantime,
Stiassny's nose keeps growing and he gets still fatter financially gouging at the public trough and at the
expense of so many hard-working and honest Kiwis.# See Related stories
STIASSNY IN FIRING LINE 23/12/06
Michael Stiassny has hit a rough patch in 2006. He was
kicked off the Met Life board, forced to resign as chair of
Metro Water and witnessed the only 3 directors with business
skills abandon the Vector board because he refused to resign
from that board two weeks ago. At the same time, Vector management has revolted at
Stiassny's specious public claims and promises of strong financial performance at Vector, coupled with his
demand that Vector CEO Franklin and CFO Peter Fredricson then find a way to produce the numbers he has
publicly claimed. CEO Mark Franklin in particular has had several confrontations with Stiassny over his
belligerent personal style and inverted business approach since being recruited from Australia two years ago.
In addition to almost doubling his own pay, Stiassny had to seek approval of a pay package approaching a
million dollars per year in order to placate Franklin and thereby prevent an open and nasty revolt.
Then there was Stiassny's declared war on the Commerce Commission last winter over the Commerce
Commission's stated intention of taking over Vector (an electricity lines company) for unfair charging
practices - coupled with Stiassny's threats of power blackouts if the Commerce Commission did not back
down - as well as an active Court action that seeks to hold him personally responsible for losses suffered by
the Trinity Foundation Ltd. in relation to
a failed tax scam (see related story left column).
In addition to all this, a formal complaint this month was
laid with the NZ Police alleging Stiassny perjured himself in the
Auckland High Court in relation to fee overcharging in his
insolvency accounting practice. On 8 February 2007, Stiassny
is before the Court of Appeal in Wellington in relation to an
appeal stemming from his alleged perjury.
At Vector, John Goulter, Greg Muir and Tony Gibbs resigned Vector CEO Mark Franklin & CFO Fredricson
from the Vector Board on 13 December 2006, citing the direction of the company and Stiassny's refusal to
step down as their reasons for leaving. Their abandonment leaves Stiassny's girlfriend Karen Sherry and Shale
Chambers, both with limited business backgrounds and virtually no board experience, and the vacillating
Robert Thompson to govern the $3.7 billion dollar company (or $5.7 billion company according to Stiassny).
Of particular concern to Vector investors was Staissny's replacing the now departed Goulter as chairman of
the Risk and Assurance Committee with Ms. Sherry, virtually the only person who is blind to the risks
imposed upon the organization by Stiassny.
One of many immediate challenges Vector faces is how to write off $1.7 billion in 'goodwill'. While most
insiders recognize the current board is ill-equipped to deal with the challenges ahead, the board and
management at Vector are taking some comfort that, as a monopoly provider of an essential public service,
the Auckland and Wellington public have no option but to financially support the company until such time
government or regulatory authorities follow through and step in to safeguard the company and consumers.
Board member Shale Chambers, appointed only last August, is taking additional comfort in the fact that he
was not directly involved in the financial mess that currently plagues Vector and has been kept in the dark in
relation to the side deals Stiassny and Sherry have made.
Meanwhile, two former Auckland Energy Consumer Trustees have asked the Labour government to
investigate Mr. Stiassny's conduct in relation to Vector. As if this was not enough trouble facing Stiassny,
consumer advocate Penny Bright of the public watchdog Water Pressure Group was last week successful in
advancing two Parliamentary select committee inquiries into Stiassny's conduct at Metro Water when Maori
MP and party leader Dr. Pita Sharples tabled the complaints before Parliament. They include petitions asking
for a parliamentary investigation into overcharging and collection practices that unlawfully targeted certain
Metro Water consumers for bankruptcy.
In July, then Metro Water Chairman Michael Stiassny admitted that water charges in Auckland were going up
9.7% instead of 3% in order that Metro Water could fund other non-water related city expenditures, such as
the $84,000 global working holiday that certain Auckland Councilors took a year ago. This admission
followed a 'public' Council meeting held in May where Stiassny demanded the meeting go into 'confidential'
session before he would discuss such financial arrangements that violate the public charter. Ms. Bright was
arrested when she refused to leave the public gallery on the order of meeting Chair and Auckland Councillor
Vern Walsh that the public leave in response to Stiassny's demand.
Ms. Bright and the Water Pressure Group's case was bolstered last week when Auckland District Court Judge
Nicola Mathers ruled that Metro Water has a legal obligation to follow its dispute process. It is uncertain
whether Metro Water lawyers Chapman Tripp will be retained now that Staissny has been forced out. Earlier
in the year Stiassny ordered Chapman Tripp to bankrupt Water Pressure Group member Moli Tevaga over a
disputed $2,800 water bill rather than follow proper administrative procedures. Mr. Tevaga was adjudicated
bankrupt in August. Metro Water spent $15,000 in legal costs. #
RECENT NEWS: 3 OCTOBER 2006 In a rare and exclusive interview, Business Editor
Tim Hunter with the Sunday Star-Times talks with Vince Siemer in regard to
Vector Chair Stiassny's declared war on the Commerce Commission and how Mr.
Hunter has been stonewalled on requests of Vector to provide support for
Stiassny's claims READ MORE
Archive News: NZ HERALD Interview 28/8/06 - On page one of the business section, reporter Anne Gibson
interviewed Michael Stiassny and talked about how Stiassny has declared war on the Commerce
Commission, the potential for power black-outs if Stiassny does not get his way, what a good Jew he is (no
joke) and she says Stiassny's "anxieties are the country's concerns". READ MORE
Archive NEWS: 9/8/06 - Due diligence determined NGC purchase by Vector would potentially create $7.9
M and not the $500M that Vector Chair Stiassny claimed to public. READ MORE
Archive NEWS: 6/8/06 - METRO-WATER raises water charges 9.6% to meet Council demand for
$18million profit READ MORE
Archive News: 22/6/06
Michael Stiassny took another step to fulfilling his promise to target his critics for bank-ruptcy using
public funds from Metro Water. Council provided approval for Stiassny's legal targeting while Mayor Dick
Hubbard ate cocktail sandwiches in the next room.
In a related story, Auckland City Councillor Bruce Hucker betrayed Auckland water consumers by working
in confidential sessions with Stiassny to raise water rates to Auckland residents yet again. The proposed
rate rises are designed to enable Metro Water funding of other city expenditures such as city councillor
trips abroad - expenses and trips that have nothing to do with water - to the tune of $10 million annually.
As many of the councillors relied upon the apathy of the voters and chose not to fight it (in politics,
counting favours is the rule of the day), Councillor Neil Abel stood by his commitment to honour his oath
of office by objecting to these secret backroom deals that plague this administration and deceive the public.
*************************************************************
Auckland City Council controls Metro Water Limited
SUBMISSION TO THE FINANCE and CORPORATE BUSINESS COMMITTEE
AUCKLAND CITY COUNCIL, Mr. Vern Walsh, Chairperson
Respectfully submitted by Vince Siemer, MBA 5 December 2005
Few things in life are as precious as a safe, reliable and affordable water supply. Next to air, water is the most
essential human need.
Michael Stiassny is the current Chairman of Metrowater. My recent research into this man’s business
background has uncovered behaviour so alarming that I am compelled to bring this information to the Finance
and Corporate Business Committee’s attention today. Mr. Stiassny’s conduct as I have witnessed it is so
egregious that I can state forthrightly –
In my informed and considered opinion Michael Stiassny is not fit to be chairman
of any public company, let alone a company that provides such an essential
human resource as water.
In support of my claim to the Committee today that Mr. Stiassny is not only unfit to remain as Chairman of
Metrowater, but that he may pose a threat to the safe, reliable and affordable supply of water to the public given
his personally callous nature and reckless management style, I will draw a parallel to Mr. Stiassny’s stewardship
of another monopoly – Vector Energy.
Stiassny has publicly represented that he has grown Vector Energy from a one billion dollar company into five
billion dollars within three years (Exhibit A). What he fails repeatedly to mention is that Vector, under his
stewardship, has amassed a horrendous debt of $3.1 Billion (from $0.8 Billion just a few years ago).
RECKLESS FISCAL MANAGEMENT
Anyone can build a five Billion dollar house of cards if they are able to borrow enough money and place an
intangible value on the result. Stiassny is preaching how he built a five billion dollar company but I submit to
you that this is misleading and it minimally fails to acknowledge the tremendous debt that the consumer
ratepayers – not Stiassny – are ultimately responsible for.
This is particularly ominous in the case of Vector for several reasons:
1) Interest rates have risen recently, and are projected to go higher still, meaning the debt that Stiassny
created is increasingly encumbering the company. This increased cost must invariably be borne by the helpless
consumers or taxpayers.
2) In July, Standard and Poors put Vector on a negative credit watch, stating “The potential negative outlook
reflects the likely deterioration in financial metrics over the short to medium term” (Exhibit B).
3) This negative credit watch was despite the company’s low-risk electricity network business, the scale and
diversity of its operations and its robust service area.
4) Vector announced a 30% decline in profit immediately after the public share offering, the IPO date itself
having been inexplicably moved up a week. Vector blamed the profit decline on increased electricity
transmission costs of 15% and increased electricity maintenance costs of 35% over last year, and admitted this
profit decline occurred despite higher selling prices being paid by the consumers (Exhibit C).
So what would you do if you were Chairman of this teetering mess? We know what Stiassny did – he threw a
party! Despite credit rating pressures, huge debt becoming more expensive to manage due to rising interest rates
and significantly declining profits, Stiassny elected to increase dividends to trust beneficiaries!
I submit to you today that this is not a rational action for a responsible manager, but it may help explain how Mr.
Stiassny’s official compensation has almost doubled in his short tenure at Vector.
Can the Auckland City Council afford to leave such a man in control of a valuable and necessary resource as
water?
Vector would be relatively fortunate if Stiassny’s poor fiscal management was its biggest problem. At a recent
Institute of Directors presentation, Stiassny claimed to have made Vector a Half Billion dollar profit on the recent
purchase of NGC alone! This pegging of value was apparently determined by extrapolation of the sum value of
the 24.9% initial public share offering at the peak of its share-trading price after the recent float. To be sure, Mr.
Stiassny’s short-term capital gain claim had nothing to do with intrinsic value as determined by factors such as
tangible asset value or even anticipated return on investment. Mr. Stiassny’s half billion dollar short-term capital
gain claim was as bold as any Enron accountant – and equally alarming! And Stiassny is a Chartered
Accountant!
LEGAL INTIMIDATION AND BULLYING
And it gets worse. It is common knowledge that Stiassny initiated defamation proceedings against one former
trustee of the Auckland Energy Consumer Trust and took legal action against another to prevent that trustee from
voting against his retention of the Vector chairmanship. Consequently, Mr. Stiassny was re-elected by only two of
the five AECT trustees. Given Mr. Stiassny’s propensity to use the legal bludgeon to beat his critics into
submission, it is quite possible that at least one of the two trustees who did vote for Stiassny might have done so
for reasons having nothing to do with his abilities.
Please make no mistake. Even if Stiassny has not threatened you with legal action, his legal bullying tactics are
tainting Metrowater (and Auckland City Council) directly. At the Institute of Directors meeting noted above, Mr.
Stiassny began his presentation by gloating he was in the process of bankrupting the Water Pressure Group
members protesting peacefully outside. Not only was there no cause for this outburst, it made many people in the
room understandably uncomfortable. This behaviour was duly reported to the Energy Minister in a letter dated
25 October 2005 (Exhibit D). While Stiassny may be free to spend his own money in suing people who criticize
him, it will prove scandalous in my opinion if the Auckland City Council has authorized Mr. Stiassny to use, in
effect, water receipts (Metrowater funds) to legally bankrupt people he disagrees with, and without legitimate
cause.
I have been fortunate to travel many places in the world. It has always impressed me in my travels that Kiwis as a
group are the most resourceful and adaptable people on the planet and are particularly astute at cutting through
all the propaganda in accurately assessing a situation when it comes to hand, and then taking the appropriate
action. It pains me to see so many of these decent, conscientious people bullied and taken advantage of by Mr.
Stiassny while the elected representatives with the power to cut off his legal war-chest wring their hands. Change
is needed.
EXHIBIT A
INSTITUTE OF
DIRECTORS
in New Zealand Inc
Breakfast with Michael Stiassny
Topic: From a one billion dollar
to a five billion dollar business in three years - the evolution of Vector.
Michael Stiassny, BCom, LLB, CA, is a chartered accountant and senior partner of Ferrier Hodgson & Co
in Auckland.
He has significant experience in insolvency, investigating accountant work, company restructuring and
due diligence.
He is currently chariman of Vector, NGC Holdings Ltd and Metrowater Limited, as well as a director of a
number of public and private companies, including Metlifecare and The Horticulture & Food Research
Institute of New Zealand Limited. He is also a member of the Auckland Branch Committee of the
Institute of Directors.
When: Wednesday October 19th. 7.15am for 7.30am
Where: The Northern Club, Princes Street, City
Cost: Members $35 Guests (with IoD Member) $40
EXHIBIT B
VECTOR AND NGC PUT ON NEGATIVE RATINGS WATCH
By NZPA
Tuesday 28th June 2005
Standard & Poor's said today it was putting Auckland energy company Vector and NGC Holdings on creditwatch with negative
implications following Vector's announcement of a full NGC takeover bid yesterday.
Vector yesterday made a $3.40 per shares scrip and cash offer for the remaining 32.8% of NGC it does not already own ahead of
the float of a quarter of its shares that will raise $593 million.
NGC shareholders will be offered 78c cash and the rest in new Vector shares.
S&P said if the IPO and acquisition proceeded under the terms and conditions expected, then the ratings on Vector and NGC
were likely to be affirmed at BBB-plus with a negative outlook.
"The potential negative outlook reflects the likely deterioration in financial metrics over the short to medium term." S&P said.
A major part of the decision to affirm the rating will be an assumption that Vector repays its equity bridge, either from its IPO
proceeds or other means, before the end of October 2005, the international rating agency said.
S&P said Vector's rating reflected the company's low-risk electricity network business, the scale and diversity of its operations, its
robust service area, and current regulatory price-path certainty.
"In addition, Vector is expected to benefit from the broadening of its business profile that results from assuming full control
over NGC's gas businesses, including its transmission and distribution business.
"These strengths are offset Vector's moderate financial profile, uncertainty regarding the level of Vector's final shareholding in
NGC, and consequently the extent of the integration that will ultimately occur and the associated integration risks."
NGC's rating reflected its strong market position in gas transmission and distribution, its diversified revenue base, and its
moderate financial profile as well as Vector's creditworthiness. "These strengths are mitigated by New Zealand's depleting long-
term gas reserves and any implications arising from the current regulatory review of gas transportation," S&P said.
Vector expects to be listed on the exchange in the spring with a capitalisation of up to $2.38 billion.
NGC shares jumped 22c to $3.782 yesterday and rose another 3c to $3.75 today - well above the implied takeover price.
Last year, valuers Grant Samuel said the underlying value of NGC shares was in the $2.50 to $2.76 range.
EXHIBIT C
EXHIBIT D
25 October 2005
The Honourable Mr. David Parker
Minister of Energy
Parliament Building
WELLINGTON
Dear Mr. Parker
On 19 October 2005, Michael Stiassny gave a presentation at an Institute of Directors meeting at the Northern Club in
Auckland titled
“How to turn a one Billion dollar business into a five Billion dollar business in three years – the evolution of Vector”.
As an energy consumer and ratepayer, I was extremely troubled by several aspects of Mr. Stiassny’s presentation. These were:
1) Chairman Stiassny claimed to have increased the value of Vector a HALF BILLION DOLLARS solely through his
orchestration of the recent NGC buyout by Vector.
2) Under his tutelage Vector shareholders have enjoyed increased dividends.
3) While accepting regulation of monopoly enterprises is here to stay, Stiassny suggested the shareholders and particularly
those in attendance could appeal, as voters, to their politicians for less intrusive regulations – regulations that tend to stymie
growth.
The intrepid manner in which Mr. Stiassny bragged to the directors in attendance of adding a Half-Billion dollars to the value
of Vector through the NGC purchase alone was as frightening as it was unsound. Minimally Mr. Stiassny confused the
investor “honeymoon” after the recent float, combined with the market hype that accompanied this launch, with intrinsic
value. In point of fact, Vector has recently struggled, with a 30% annual profit decline over the last year, and NGC had been
independently valued at substantially less than Stiassny’s claim – yet neither garnered a mention by him. Additionally,
Standard and Poor’s in July put Vector on a negative ratings watch, saying “the potential negative outlook is a result of an
expected decline in financial metrics over the short to medium term”.
Perhaps most alarming is the fact that all these dour developments have occurred within Vector despite a buoyant economy,
increased selling prices and infrastructure changes at Vector.
That Mr. Stiassny raised dividends - and brags about this move - at a time of substantially declining profits, is reminiscent of
Nero fiddling as Rome burned. Whether any argument can be made for increasing dividends at a time of drastically declining
profits, it is not difficult to deduce the motivation for such a payout in these circumstances.
Vector blamed the recent poor financial performance on substantially increased transmission and maintenance costs under
Stiassny’s stewardship. Not only does this speak poorly of Mr. Stiassny’s fiscal management – or lack thereof – but it has
profound and far-reaching implications to the consumers in particular and the economy in general. This is because, unlike
other businesses and industries where the consumer has a choice and can avoid an inefficient and poorly run business that
does not provide value for the money, Vector provides an essential service in a monopoly environment. While the consumer and
ratepayers are not compelled to foot the financial bill for inefficiencies and poor performance in typical businesses (they simply
choose another supplier of the good or service) this cannot be said about Vector. In fact, any poor management performance by
Mr. Stiassny must invariably be financially underwritten by the unsuspecting and captive consumer and ratepayer
beneficiaries.
As a monopoly enterprise, this is particularly true if Mr. Stiassny is able to increase prices to offset poor management of such a
vital industry. In this scenario, the economy at large is directly and negatively impacted through inordinate cost pressures on
the productive sector and pressures upon inflation in general. Hence, Mr. Stiassny’s mantra that regulation might be softened
through the collective voice of the voters was most disturbing.
I was deeply troubled by Mr. Stiassny’s presentation and posed the question to him at the conclusion of his talk – a question
made all the more relevant by my observation that such contrived and inaccurate financial outlooks are typical of businesses
under Mr. Stiassny’s stewardship that I have examined – to “name two companies where your stewardship resulted in a tangible
benefit to shareholders?”. In response, Mr. Stiassny claimed that Vector was one such company – evidenced, he said, by the
increased share value after the IPO launch. I responded that this was a result of market hype – as he himself had conceded –
and had nothing to do with fundamentals such as return on investment. At this, Mr. Stiassny went silent and the moderator
called an end to the questions and the presentation. Mr. Stiassny was unable or unwilling to name one other company.
As an interesting anecdote, Mr. Stiassny devoted the first five minutes of his presentation attempting to explain away the half
dozen protesters carrying placards outside the meeting, with messages such as ‘Stiassny the Corporate Thug’ and ‘Dump
Stiassny’, as people who were not paying their water bills – “not because they couldn’t afford to but because they didn’t want
to”. He went on to say slyly that this is why we have people around “called lawyers” to deal with these people and that he was
in the process of bankrupting these protesters! His vitriolic rant at the protesters was not only an unwelcome concession to the
effectiveness of their peaceful demonstration but made many people in the room quite uncomfortable.
Few omens present themselves with such clarity. In my honest, informed and considered opinion Mr. Stiassny’s presentation to
the Institute of Directors breakfast meeting on 19 October 2005 portends an ominous threat to the energy sector, as well as the
economy in general. As such, it would be prudent for you to obtain a copy of Mr. Stiassny’s presentation so that you might
judge this for yourself. With all due respect, like the canary in the coalmine, we can ill-afford to ignore the warnings.
One final note: Do not expect the Auckland Energy Consumer Trustees to provide a safeguard against Mr. Stiassny. Tellingly,
Mr. Stiassny was re-elected Chairman of Vector despite the fact that only two of the five trustees voted for him. Mr. Stiassny had
taken legal action against one of the trustees at the time of this vote and had previously engaged lawyers to threaten suit against
another trustee for defamation after she spoke out against him. In this environment, it is also not difficult to see how two of the
five might vote for him. (In the interests of full disclosure, I will tell you that Mr. Sitassny has also filed a million dollar
defamation lawsuit against my company and me.) Moreover, it is my understanding today that Mr. Stiassny has all of the
existing trustees currently tied up by a confidentiality agreement that provides him legal recourse against them if they speak out
against him. If this is indeed the case, it is unreasonable to expect any of them to blow the whistle until after this ship is well
and truly sunk.
Sincerely,
Vince Siemer, MBA
27 Clansman Terrace
Gulf Harbour
Mr. Mark Weldon
Cc: The Hon. Harry Duynhoven New Zealand Share Exchange
Associate Minister, Energy PO Box 2959
Parliament WELLINGTON
WELLINGTON
AECT Trustees (Shale Chambers, M.
Mr. Bruce Sheppard Buczkowski, John Collinge, W. Kyd, K.
NZ Shareholders Association Sherry)
P.O. Box 6310 Faxed to 09 978 7516
Wellesley Station
AUCKLAND The Hon. Dr. Michael Cullen
Deputy Prime Minister
Mr. Tim Hunter Parliament
Editor, Sunday Star-Times WELLINGTON
P.O. Box 1409
AUCKLAND
Mr. Michael Stiassny
Vector Energy
Faxed: 09 978 7799
| 50,000 VISITORS in 8 months! The NEWS is spreading! **************** This site is a resource to all New Zealanders curious about pressing news stories not being reported by the government media reporters who fear retribution from the secretive & often malevolent New Zealand Courts. The catalyst for this site is a shady and morally bankrupt accountant named Michael Stiassny who for years has preyed on New Zealand citizens with the assistance of a few old lawyer friends who have become High Court judges. His story is not an isolated case but rather a watershed in New Zealand justice. |
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