Lyttelton Port still in storm

By Chris Hutching

Friday 15th November 2002

Lyttelton Port Co's corporate affairs remain in a state of turmoil following the departure last week of managing director David Viles who followed the earlier exit of chairman Brent Layton.

The share price continued to languish at about $1.47 a share, representing a loss in market capitalisation of about $25 million in recent weeks.

Mr Layton's removal was at the behest of 65% municipal shareholder Christchurch City Holdings (CCHL) after the port lost shipping contracts partly because of failure to secure an industrial agreement with waterfront unions.

The departure of Mr Viles is believed to have come after similar backroom pressure, although none of the parties is admitting to anything or disclosing the value of his severance package.

CCHL has become even more closely involved in the affairs of the port company since Mr Viles' departure because he leaves a temporary vacancy on the board.

The National Business Review understands the board of the port company is sharply divided over the appointment of a new director, particularly after the new chairman Barney Sundstrum sought CCHL guidance on who the new appointee should be.

Mr Sundstrum is taking his direction from CCHL but other board members are concerned about governance and independence.

There are many ironies as the port saga has unfolded. The unions have taken comfort from their political associations with the ruling Labour clique at the city council, which regarded Mr Viles and Dr Layton as natural ideological foes. But while removing the two top players and replacing them with personnel more amendable to CCHL may eliminate some of the personal friction between the parties, it is unlikely to solve the inherent problem of productivity and flexible rostering arrangements at the port.

This week the unions were engaged in formal mediation talks with the port company but failed to resolve the issues and more meetings will be held.

Meanwhile, other senior executives and contractors are living in a state of uncertainty about their own futures with the company.

Mr Viles joined Lyttelton Port Co in 1991 as operations manager. After playing a major role in port reform, he was appointed chief executive in 1995 and a year later the company listed on the Stock Exchange. On most measures the company has performed well since that time and one of the ironies in the whole story is that he was probably one of the parties seeking to please CCHL by paying large special dividends in 1998/99 that have led to concerns about lack of reserves for upgrading infrastructure.

In his statement last week Mr Viles said: "The board is now looking for a change in emphasis and direction. The board of directors and I have therefore mutually agreed that it is an appropriate time for someone else to take over, given that change in emphasis and direction. However, I leave satisfied with the commercial performance of Lyttelton Port Co under my leadership."

Chairman Mr Sundstrum said he had made a significant contribution to the commercial success of Lyttelton Port and he thanked him for that and wished him all the best in his future endeavours.

"We will be advertising for a replacement for Mr Viles and in the interim, Chris Connor, the company's general manager operations, will be acting chief executive," Mr Sundstrum said.

Comments from our readers

No comments yet