Fletcher staff gag over poison pill trust plan

Friday 20th July 2001

FLETCHER UNDER FIRE: Staff have fired off a barrage of emails opposing the asset strip of an educational trust meant to benefit them

By Deborah Hill Cone

Pressure was building yesterday for trustees to back down over plans to strip the assets of the multimillion-dollar Fletcher Challenge Energy Employee Educational Fund (EEF).

The National Business Review revealed last week staff were angry over a proposal to wind up the EEF - a trust intended to benefit them and their children - and shift its $11 million in assets to a new vehicle with different, unspecified aims.

Staff at Fletcher Energy's soon-to-be-sold Taranaki operations fired off a barrage of emails to trustee Norm Godden after the report.

"There's a huge amount of despair here that at a corporate level there are yet again [these sort of] goings-on," one Taranaki staff member said.

In response to a series of questions from staff, Mr Godden and other trustees Greig Gailey and Tim Henaghan released a scant reply saying they were entitled to transfer the EEF's assets because legal advice from Bell Gully told them so.

The trustees admitted:

They have discretion to give the money to employees but have chosen not to;
The beneficiaries - Fletcher Energy employees - have no say in the winding up of the EEF or what happens to the money; and
The trust has never given out a single grant.

They were not specific about who will benefit from the new trust they are planning, although it has been suggested the money may be used to set up a university professorial post.

That proposal has riled staff, many of whom are being made redundant and say they could use help in retraining and education.

The fund was created when a $110 million central trust, a device to thwart takeovers, was split into individual trusts for each of the letter stocks last year when the company was dismantled.

Two of the other funds have managed to get on with their business in the spirit of the original trust deed. The $78 million Fletcher Challenge Building EEF has made a series of grants, including for literacy programmes, with trustee Mark Binns saying it plans to distribute $3-4 million each year.

Fletcher Challenge Forests EEF is also distributing cash to programmes, including life skills courses such as Outward Bound, job skills courses and scholarships totalling $1 million a year.

Meanwhile, it has been revealed the original Fletcher EEF was a sham, with staff invited to apply for "grants" but the money having to be sourced from their departments' own budgets.

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