By Chris Hutching
Friday 29th August 2003
|Text too small?|
Westland mayor John Drylie and other promoters of the scheme are resisting calls from ratepayers to resign in the wake of the scandal (NBR, Aug 8).
Audit New Zealand said Westland District Council loans and monitoring processes fell short of best proactive. The loans were arranged via the council's economic development unit called Westland's Working.
Audit NZ said there was the potential for difficult governance dynamics because the unit's board was comprised of 12 councillors and community representatives, many of whom were and are involved in personal and business dealings within the small community.
The formal application for a loan from FT Manufacturing was dated February 15, 2002, for $1.5 million and in other discussions it was agreed the full quantum of loans would be $6.5 million, the same amount that had been applied from (and declined by) the West Coast Development Trust.
FT Manufacturing's application of $1.5 million represented half of the original Westland's Working allocation of $3 million for what were supposed to be small-to-medium-sized loans for economic development projects.
"In our opinion, the effectiveness of the due diligence process was compromised," the report says.
"The chair's paper to the committee ... hints that the company has other 'possible' offshore investors that would mean establishment of the facility overseas.
"Further, the same paper notes [promoter Soren Kiekegaard] 'has stated that unless he can secure sufficient funding by mid-March he will be unable to meet targets and the whole enterprise is at risk.'
"We did not sight any documentary evidence to substantiate this view.
Indeed, from an impartial observer's hindsight view, it appears the committee was being persuaded into making a rushed decision."
No comments yet
Plexure sees revenue growth from White Castle deal
22nd July 2019 Morning Report
NZ dollar treading water as markets focus on Iran
MARKET CLOSE: NZ shares extend gain as passive funds bolster prices; Tourism Holdings climbs
NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut
RBNZ knock-back gives Resolution chance to low-ball AMP - Jarden
Rail hubs may not boost Napier Port log trade
O'Connor looks to overhaul Biosecurity Act, improve animal tracing
Denton Morrell undefended at liquidation hearing
Contact steam to heat Norske Skog pellet business secured