By Deborah Hill Cone
Friday 15th August 2003
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Canwest chief executive Brent Impey confirmed the company did a deal to invest in forestry in the South Island in the mid-1990s but this was before his time.
"It's a Douglas fir forest down in central Otago but I wasn't involved in the deal at all. They [CanWest] have had it as a business for half a dozen years or so," Mr Impey said.
He referred The National Business Review to CanWest's international operating officer, Tom Strike, for details, but a Canada-based spokesman said the media company, which is listed in Toronto and New York, would not comment on the issue.
The forestry investment is a puzzling fit with CanWest's other assets since it solely owns radio stations, newspapers and television stations in Canada, Ireland, Australia and New Zealand.
"Why would a media company be investing in forestry it's not even a conglomerate, " one media source asked.
Since a reorganisation of its corporate structure last year CanWest is no longer a New Zealand-registered company and is not required to file financial statements with the Companies Office.
As NBR reported four years ago Trinity is a tax-efficient long-term forestry venture that allows investors to claim upfront tax deductions with a long deferral period. The scheme offered a range of different deals, with individuals investing several millions of dollars each.
A tax source, familiar with the structure, said CanWest had signed up for a significant proportion of the offering, which he estimated at up to a third of the units.
The Trinity scheme, which was kept secret with advisers asked to sign confidentiality agreements, was said to involve cutting rights to Douglas fir trees that take up to 35 years to grow.
Tax sources explained the scheme utilised the long time frame, which meant there was a mismatch between when the expenses can be claimed, usually in the first year, and when the income is brought to account, which may be up to 35 years later.
Mr Impey said he had visited the forest.
"I did pay them one visit and I thought this is a hell of a lot easier than managing TV and radio."
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