22 May 2013

Govt taking tougher approach to SOEs

9:31 pm on 22 May 2013

In the wake of Solid Energy's financial problems, the Government is taking a tougher approach to monitoring its state-owned enterprises.

But the union that represents coalminers says the stricter monitoring of SOEs has come too late.

The release of another batch of documents by the Treasury confirms how tense its relationship had been with Solid Energy, which is at least $390 million in debt and faces the possibility of collapse.

The emails also disclose the Government told SOE chairs last December they would face tougher monitoring of their companies' performance.

Engineering, Printing and Manufacturing Union assistant national secretary Ged O'Connell says the Government should have imposed tighter scrutiny when it demanded Solid Energy take on more debt and pay higher dividends.

Meanwhile, Prime Minister John Key has rejected Labour Party claims that Solid Energy never asked the Government to invest $1 billion in a national natural resources company.

Documents released under the Official Information Act confirm that the State-owned coal company had ambitious plans, but there is no reference to the company wanting $1 billion from the Government.

However, Mr Key on Wednesday was adamant that the demand had been made.

"Not everything is in the documents. For a start off, if you go and have a look at the situation there, what they certainly indicated was they want no dividend paid for a long period of time. That alone would add up to a billion dollars."

Mr Key says Solid Energy also wanted part of the company sold, but not in a partial share float as proposed by the Government.