NZPA: 24 September 2008
The country's rail operator and tracks will be overseen by one state-owned enterprise, Finance Minister Michael Cullen announced today.
Dr Cullen said from October 1, KiwiRail and Ontrack would report to the board of the New Zealand Railways Corporation, which would be chaired by former prime minister Jim Bolger.
Mr Bolger currently chairs the establishment board of KiwiRail, the Government's name for the rail operation business it bought back from private company Toll in July.
At the time Dr Cullen said it was likely that Ontrack -- the state-owned railway track company -- and KiwiRail would become separate operating units of a single SOE.
Today he confirmed that arrangement.
He said the current members of the board of the NZ Railways Corporation, essentially a holding company for remaining rail assets from the sell off in the 1990s, had resigned with effect from the end of the month.
Dr Cullen said he would announce the next tranche of capital funding for rail upgrades and expansion next week.
The Government initially injected $80 million into KiwiRail after its purchase to keep operations at their current level in the immediate future.
But Dr Cullen has previously signalled an additional upgrade package of around $300 million would be likely.
Key cops a battering over share revelations
NZPA: Tuesday, 23 September 2008
WHAT SHARES? Finance Minister Michael Cullen is accusing John Key of lying over his Tranz Rail shareholding after the National leader was forced to admit he had owned more shares than was previously thought.
Labour today poured scorn on National leader John Key over his handling of his Tranz Rail shareholdings.
Mr Key has admitted he should have disclosed the full extent of his shareholding earlier, but has denied using his parliamentary position for personal profit.
He fronted media today after Finance Minister Michael Cullen yesterday accused him of lying about his shares.
Mr Key failed to disclose his Tranz Rail shareholding, which Labour says amounted to a conflict of interest, when he was National's associate transport spokesman in 2002 and 2003.
That was because he asked parliamentary questions about the Government's planned buyback of the country's rail tracks while holding the shares.
When Mr Key was questioned on the issue earlier this year he said his family trust had held 30,000 shares in the company, but sold them on June 9 and June 12, 2003.
But Dr Cullen revealed yesterday Mr Key's family trust had in fact owned 100,000 shares.
Dr Cullen said today Mr Key had initially tried to lie about the issue when asked about the issue by a reporter.
"He should have declared the conflict of interest. It is the perception around conflicts of interest, not just the reality."
It had been wrong of Mr Key to vigorously pursue information on Tranz Rail at the time the shares were being traded.
"He bought and sold shares at a profit, all of that while never disclosing an interest. He has been caught red-handed," Dr Cullen said.
Mr Key today said he did not know about the additional shares when he answered questions in July, but found out later on and should have disclosed it.
"I'm prepared to accept and I fully accept that. . . when I found out later on that there was a bigger shareholding even though the story had politically passed in the media, I should have come back and said that."
He said the number of shares varied at different times and was managed by a broker who had authority to act without referring back to the trust.
He said all the shares were owned by the trust and information on the share register that he had personally bought 50,00 shares was incorrect.
He said he did not personally gain from the shares and when rail started becoming a hot political issue, he sold them at a loss.
Labour has tried to paint Mr Key as a hypocrite for criticising New Zealand First leader Winston Peters, when he himself failed to disclose a pecuniary interest.
But Mr Key rejected that. He said his share information was on the public share register, there was no Register of Pecuniary Interests for MPs until 2005, and whether he owned 30,000 or 100,000 shares was irrelevant to conflict of interest questions.
Questioned on the issue before he was aware the information had been released yesterday, Mr Key told One News his shareholding ranged between 25,000 and 50,000 shares up until June 2003.
It wasn't until pressed on the issue he admitted there were more shares.
Today Mr Key said his initial reaction to the question was a "genuine mistake", but New Zealanders could still trust him.
"I'm a person who operates in an open way. If I've made a mistake I'll front up and say I've made mistake."
Mr Key said he had acted in 2003 to get rid of all his shares.
Key 'unethical' over Tranz Rail shares - Labour
NZPA: 22 September 2008
The Finance Minister has accused National Party leader John Key of acting unethically after new revelations he held Tranz Rail shares at the same time as attacking the Government's rail buyback plan.
It was revealed tonight that Mr Key held 100,000 shares in Tranz Rail through a family trust – not the 30,000 as reported earlier.
Mr Key's interests became an issue earlier this year when Labour claimed a conflict of interest because he had asked parliamentary questions about the Government's planned buyback of the country's rail tracks while he still had a shareholding in the rail operator.
Despite his role at the time as National's associate transport spokesman, he did not disclose his shareholding.
Mr Key said tonight it had been known for months that his family trust had held shares in Tranz Rail.
"The shareholdings were managed on my behalf by my broker who had the authority to act on individual share parcels without referring back to the trust," he said.
"This attack by Michael Cullen and the Labour Party research unit is further evidence they will run a desperate smear campaign against me."
When Mr Key was questioned on the issue this year he said his family trust had held 30,000 shares in the company, but had sold them on June 9 and June 12, 2003.
He said his questions and comments never led to any gains from the company's share value.
But Finance Minister Michael Cullen today released correspondence and share register information contradicting several of Mr Key's claims.
The information showed Mr Key, through his trust and under his own name, had owned 100,000 rather than 30,000 Tranz Rail shares.
Questioned on the issue before he was aware the information had been released, Mr Key told One News his shareholding ranged between 25,000 and 50,000 shares up until June 2003.
But when pressed on the issue he admitted there were more shares.
"Actually maybe 100,000 from memory, sometimes 50,000, sometimes 100,000, yep," he said.
"Yeah, sorry, there was 100,000 in total."
Mr Key said no one had questioned him previously on exactly how many shares he had owned.
The papers released by Dr Cullen show Mr Key personally bought 50,000 shares in Tranz Rail in May 2003 after he had actively pursued information from the Government on the company.
He sold those shares five weeks later for $51,000 – more than double their $22,500 purchase price.
However, 50,000 shares bought by his family trust in February 2002, were sold in June 2003 at a loss of $132,000.
Dr Cullen said Mr Key should have declared his shareholding to Parliament and his failure to do so was unethical.
"John Key lied because he knew he had something to hide," he said.
"Mr Key was in fact commenting publicly on Tranz Rail, meeting with bidders for the rail track and vigorously pursuing the release of commercially relevant information all while being an undisclosed shareholder in the firm."
Dr Cullen said Mr Key had spent a lot of time attacking Prime Minister Helen Clark's credibility over the New Zealand First donations scandal, but had covered up his own actions.
"For him to have in effect grossly misled both the media and the public on this I think raises that issue of trust yet again," he told reporters.
"Clearly Mr Key was not simply not forthcoming, he actually lied."
Not revealing his shareholding was a clear breach of Parliament's Standing Orders, Mr Cullen said.
Key’s lies continue – what’s next?
NZ Government Press Release: 23 September 2008
John Key continued to lie last night as he attempted to explain away hard evidence that he had a major, undisclosed conflict of interest in Tranz Rail, Finance Minister Michael Cullen said.
It was revealed yesterday that Mr Key had 100,000 shares in Tranz Rail in 2002-2003 – a full 70,000 more than he had previously disclosed. 50,000 of these shares were purchased in Mr Key’s own name while he was an MP and after he started seeking commercial information and commenting publicly in Parliament.
When confronted with the facts last night, Mr Key continued to lie before finally conceding that he had in fact misled the public.
“John Key lied because he knew he had something to hide,” Dr Cullen said. “And then under pressure last night he just kept on lying.”
In a defensive, misleading press statement he continued to imply it was only his family trust that held shares. He even tried to create the impression that shares were bouncing around outside his control, saying his level of shareholdings ‘varied’ at different times.
“Yes, Mr Key, they did vary – because you were actively buying and selling them.
“In one eight week period Mr Key asked written and oral questions in Parliament, lodged an OIA request to me, bought 50,000 shares in his own name, met with Rail America, complained to the Ombudsmen about his OIA, and then sold his personal holdings nearly doubling his money in the process.
“We know Mr Key’s claim that he sold the shares because he wanted to publicly speak out on rail is proved a lie by the facts. He was speaking out through his newsletter, he was taking meetings with bidders for the rail system, and trying to get me to release commercial information to him.
“No aspect of Mr Key’s story can now be trusted. He has lied in July to reporters and the public and he did it again last night. He needs to produce any correspondence he had with his broker during 2002 and 2003 at the very least.
“And he also needs to give us the real story about why he sold the shares. He should tell the truth now to save himself at least some embarrassment when the real story emerges.”
Timeline of Key’s Tranz Rail share conflict
15 February 2002 - Through his family trust John Key buys 30,000 shares in Tranz Rail, owners of New Zealand’s rail system (dates for share purchases reflect appearance in register)
19 February 2002 –Family Trust purchases an additional 20,000 Tranz Rail shares
July 2002 –John Key elected to Parliament
30 and 31 October 2002 –Key asks series of Parliamentary Questions relating to Tranz Rail and the future of the rail track. Ministers reply to questions. His shareholding interest is not disclosed.
9 April 2003 –In Parliament at Question Time, Key asks detailed question of Finance Minister seeking information about ‘secret meetings’ between the government and Tranz Rail. His shareholding interest is not disclosed.
14 April 2003 –Key asks Written Parliamentary Questions to Finance Minister seeking dates and details of government meetings with Tranz Rail
23 April 2003 –Key writes to Finance Minister seeking copies of minutes from government meetings with Tranz Rail. Request declined on commercial secrecy grounds.
7 May 2003 –John Key purchases an additional 50,000 Tranz Rail shares, this time in his own name
20 May 2003 –In his Parliamentary role as Associate Transport Spokesman Key meets with Rail America to discuss their views on Tranz Rail. Shareholding not disclosed.
27 May 2003 –Key complains to Ombudsmen Anand Satyanand over Cullen’s refusal to release commercial information on Tranz Rail
10 June 2003 –John Key sells the 50,000 Tranz Rail shares he purchased in his own name
11 June 2003 –John Key ‘intensely’ questions (Key’s own words) Finance Minister Michael Cullen on Tranz Rail issue. Cullen expresses his view that Tranz Rail is carrying hundreds of millions worth of liabilities.
13 June 2003 –John Key sells the 50,000 Tranz Rail shares purchased through his family trust
18 June 2003 –Key attacks government over Tranz Rail and plans to buy back the track. Recent shareholding interest is not disclosed.
16 October 2003 –Key raises Tranz Rail in what appeared at the time to be an apparent hypothetical reference in the debate over Pecuniary Interests Legislation:
It might be a bit uncomfortable, but if I am a shareholder of Tranz Rail and I want to get up in this House and start talking about that company, then my shareholding is relevant.