Thursday 30th August 2018
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Vector’s major shareholder is seeking a special meeting to formally remove company chair Mike Stiassny from that role.
Entrust, which holds 75 percent of the firm’s shares on behalf of customers of the former Auckland Electric Power Board, said it has taken the unprecedented step due to an “irrevocable” breakdown in its relationship with Stiassny, who is due to step down at the company’s annual meeting in October.
Entrust chair William Cairns said the trustees made the “difficult” decision last week.
“Since May, when Entrust decided not to support Mr Stiassny’s re-election, his behaviour has changed,” Cairns said in an emailed statement.
“We have lost confidence and it is now time to take action to remove him as chairman.”
The trust has sought a special meeting on or before Oct. 5. The Vector AGM is scheduled for Oct. 29 - three days after voting closes for the Entrust elections.
Cairns said that since May Stiassny had made a number of decisions the trust did not consider were in the interests of shareholders, including delaying the company’s AGM by a month. His suggestion to media that the trust may look to sell down its holding in the company to help Auckland fund its infrastructure deficit had also caused unnecessary distress to consumers.
“There is no basis in fact for this suggestion and Entrust is concerned that these comments were made by Mr Stiassny for the purpose of discrediting trustees and furthering a personal agenda.”
Stiassny said the call for the special meeting is the second time some trustees have tried to threaten him in order to change the date of the annual meeting.
He said it was "simply bizarre" that the trust would want to incur the added cost of a special meeting when they know he has no intention of staying on the board.
"This is not an attempt by me to stay on. I am stepping down and they know it," he told BusinessDesk.
He said the date of the annual meeting - which will follow the upcoming Entrust elections - was set by the Vector board. While previous meetings have been in September, they can be held any time before Christmas, he said. The meeting had never been scheduled for September and the board members voted individually and not, as the trust's statement would suggest, at his direction.
"I think that is offensive to my fellow directors and would infer that they would act improperly."
Stiassny said the call for the special meeting appears to reflect heightened infighting within the trust.
"It is sad and it is disappointing because they are the 75 percent shareholder in Vector."
Investors were surprised in May when Entrust, formerly the Auckland Energy Consumer Trust, opted not to support Stiassny’s re-election as chair.
Today Cairns reiterated that that decision was based on tenure and was made after taking independent advice.
Stiassny joined the Vector board in 2002 and has chaired the company for most of the past 16 years. In that time the firm acquired the Waitemata and Wellington networks of UnitedNetworks, bought gas distributor NGC, expanded into broadband and started its own metering business. It subsequently sold its Wellington power network and non-Auckland gas pipelines and has expanded into commercial-scale solar and battery storage, and metering in Australia.
Disharmony among Entrust trustees seems to have increased ahead of the coming elections. Earlier this week trustee Karen Sherry told Stuff that Stiassny's removal had been unprofessional and lacking in transparency. Earlier this year trustee James Carmichael went to court to challenge the eligibility of fellow trustee Paul Hutchison to stand during the 2015 elections. Last month the trust said Carmichael would be replaced on the Vector board by Michael Buczkowski.
While the trust vote will close before the Vector AGM, the final official count - including special votes - is not expected to be completed until Oct. 31.
Last week Stiassny told journalists and analysts after Vector's full-year earnings announcement that there had been a lot more "noise" in the financial community during the past eight months about the possibility of Entrust selling down its stake to help Auckland Council meet its funding needs. The council is the capital beneficiary of the trust.
Today Cairns reiterated that the current trustees have no plans to sell down the Vector holding.
“Entrust’s shares in Vector are not for sale and we are committed to the ongoing payment of dividends to the community, based on Vector’s financial performance – end of story.”
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