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Vector board rejects Entrust's bid for early special meeting, delays AGM

Thursday 6th September 2018

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Vector's board has decided to put off its annual meeting for a fortnight so it can include a resolution by controlling shareholder Entrust to dump chair Michael Stiassny rather than hold a separate event. 

Entrust, which owns 75 percent of Vector on behalf of customers of the former Auckland Electric Power Board, sought a special meeting to be held no later than Oct. 5, where it wanted to remove Stiassny over a relationship breakdown. Stiassny had planned to retire at the Oct. 29 AGM after 16 years in the job, saying he no longer had the shareholder's support. However, Entrust took umbrage over the timing of that meeting, which fell after its own trustee elections. 

Vector's board today said it will hold its annual meeting on Nov. 12 and will incorporate Entrust's resolution to remove Stiassny given the closeness of the two meetings. Nominations for Vector directors now close on Sept. 24. 

The company said the later date was "in recognition and consideration of the time and process required for the Entrust trustees to take office following the Entrust election that is to be held on 26 October 2018, and to enable them to be fully prepared and informed in the performance of their duties including ASM resolutions that they will be required to vote on."

Vector shares slipped 0.9 percent to $3.45. 

Separately, the Commerce Commission said it wanted feedback on a preliminary view that it doesn't need to reconsider the existing regulated price path due to new health and safety policies, which would be addressed in an upcoming review. 

"We agree that lines companies must apply the health and safety practices that they consider most appropriate to safeguard their employees and the public, but our provisional view is that the change in legislation did not itself necessitate a change in these practices," commission deputy chair Sue Begg said in a statement. “However, we accept that lines companies should not be unfairly penalised for implementing changes they consider are necessary to meet their health and safety obligations.

"If a company were to exceed the reliability standards we have set for outages on its network purely because it had legitimately and efficiently de-energised lines for safety reasons, then it is unlikely enforcement action would be warranted," she said. 

Vector said the new safety protocols increased costs by more than 1 percent of the regulated level of revenue it can generate under the price path. 

"The new and changed legislative requirements have increased costs at the organisational level," Vector head of regulatory and pricing Richard Sharp said in a letter to the regulator last year. "Vector has not yet fully determined the extent to which these costs can be attributed to its regulated business, but initial indications are that these costs are significant."

Chief executive Simon Mackenzie today said the company disagreed with the regulator's preliminary view and will make submissions "to ensure regulatory settings for 2020 onwards appropriately reflect the significant changes to the operating and legislative environment, recognise the need to prioritise safety above all, and do not discourage others in the industry from adopting similar safety policies."


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