Witness alleges Freer pledge

Press, 22 August 1978, Page 3

Witness alleges Freer pledge

PA Wellington Mr W. W. Freer, Minister of Trade and Industry in the Government of the late Mr Norman Kirk in 1974, had said he would indemnify the shareholders of Matai Industries, Ltd, a director of the company said in the Supreme Court at Wellington yesterday. The director, Henry Arthur Bourne, when asked if he was annoyed that an "agreed press release” did not use the word indemnify, said he was “a bit amazed that a Minister would really juggle words.” The shareholders of Matai are suing the Government for SIM for alleged breach of agreement in establishing a plastics industry on the West Coast. The claim names as Government agents the Treasury, the Department of Trade and Industry, Mr Kirk, Mr Freer, and the then Minister of Finance (Mr W. E. Rowling). The claim is being heard by the Chief Justice, Sir Ronald Davison, sitting as judge alone. The hearing will continue today. Mr Bourne, of Melbourne, said he was a direetgr of Matai Industries, and had a shareholding of $50,000. He had been in the plastics industry for 39 years.

He was present at meetings in Wellington between February 15 and 18, 1974, with Mr Rowling, Mr Freer and the board of Matai. “After much discussion I asked Mr Freer what did he want from Matai — was it to make money? And if it was all we had to do was relocate Matai in its entirety in Auckland and we-would make money,” Mr Bourne said. “He said, ‘No, Matai must stay on the Coast to provide work for the West Coasters’.”

Mr Bourne was asked by Mr J. Cadenhead, representing the plaintiffs, if he had ever heard Mr Freer say anything about shareholders. He replied: “Yes, in Christchurch. We had a meeting about appointing a receiver. It was agreed in principle that this was to be done. While we were organising who was to go in the aircraft to Greymouth and Westport, 1 spoke to Mr Freer. He asked me would I stay on the board of Matai, and I said yes. He said to me he would indemnify the equity of the shareholders and, what is more, safeguard the jobs of the people on the Coast.” Mr D. L. Mathieson, defence counsel: So you say Mr Freer told you before the board meeting That he would indemnify the equity of shareholders? Mr Bourne: After the

meeting when we were milling round arranging who was going on the plane — arranging what would be in the press release — all this was being discussed. I take it that you must have been very annoyed when the agreed press release did not use the word indemnify, did not refer to the equity of the shareholders, and merely spoke in general terms, which it did, about the safeguarding of shareholders’ interests? — I was not annoyed. I was a bit amazed that a Minister would really juggle words, and I believe that was the case.

You were a director of the company and you believed that the Minister had juggled words? — I did.

What did you do about it? — I spoke to my fellow directors and they were likewise disappointed. Earlier, Brian Michael Meates said that on January 16, 1974, the chairman of Matai (Mr R. Thompson) rang him at Auckland to ascertain his position on the proposed closing of the Westport factory. He told Mr Thompson he was happy for the plant to close provided Mr Kirk and Mr Freer agreed to it. He emphasised to Mr Thompson, however, that in his view it was not a directors’ decision, but a decision to be made by the politicians.

Mr Meates said that on January 18, 1974, he met Mr Kirk at Wellington Airport. “During the discussion he emphasised to me that there was to be no closing of any plant, that there was to be no liquidation, that he was more interested in the people than any losses,” he said.

"He told me that he had been able to take the political difficulties out of the grant by putting the matter in the hands of the Development Finance Corporation and that the D.F.C. would have the grant finalised shortly. “He told me that the difficulties we were experiencing were only temporary. He said, 'You are concerned about your problems. I will fix your problems and the country’s’.” Mr Meates said that on February 5, 1974, he attended a meeting at Parliament Buildings and sat behind Mr Freer and Mr Rowling. During the meeting it became clear that the answers to a good many questions they were giving were oeing provided by the then Secretary of the Treasury (Mr H. Lang). At the close of that meeting Mr Meates joined his brother, Kevin, and Mr Freer in discussing the appointment of a receiver. “I questioned Mr Freer about the shareholders’ position — Our position — with a receiver controlling the company but with no liquidator,” Mr Meates said. “He told both of us that we would suffer no loss and that he would indemnify us against that. “I walked out to the corridor and Mr Rowling stopped me. He said he wanted me to stay on the board. He wanted us all to stay. He said that the Coast was too important, and that this was the only way that he could put the funds in.” Mr Meates said that on February 18 he atended a meeting of the board in

Christchurch. After the meeting he was among those who accompanied Mr Freer on an aircraft to the West Coast. During the journey he expressed concern to Mr Freer about the people who had moved to the Coast to work for Matai. Mr Freer told him not to worry about the staff, that their position would be protected. “I again questioned him about our stake in the business,” Mr Meates said. “He told me that ‘Whatever stake you have — and the others — in the company you will be fully protected.’ He said that he was very grateful for what the family had done and that the business would continue to grow and that he would ensure sufficient funds were injected to make it go. He expressed concern about the proposed regional development conference.” Cross-examined by Mr Mathieson, Mr Meates agreed that he had himself referred to one meeting at which Mr Kirk spoke of a grant and had told him to keep that fact under wraps. Mr Meates was asked by Mr Mathieson if the problem with any grant to Matai before the Budget was simply that it might appear Matai was receiving something not available generally. He replied: “No, I would not agree. The main problem with the grant was a political one.” Asked what he understood that political difficulty might be, Mr Meates replied: “Mr Kirk did not want Mr Muldoon to know about it because in his view it would represent to Mr Muldoon a political club. Mr Mathieson: In other words, favouritism to Matai because of Kevin Meates’s friendship with Mr Kirk? Mr Meates: Mr Kirk did not elaborate beyond that point. But that is what you took his meaning to be? — I think that could be one of his reasons.

Later, in cross-exam-ination, Mr Mathieson suggested that if $500,000 had Seen paid to Matai with Mr Muldoon as a director, there was no way in which Mr Muldoon could be kept in the dark about such payment. Mr Meates: The important point I think is the mechanics of the Government paying the grant. Mr Mathieson: I put it to! you that it was the question' of favouritism which you • understood Mr Kirk to be ; worried about and which was removed by the Budget provisions and announcements? Mr Meates: I agree it was one of the thoughts. Because after the Budget if you received anything under the special subheadings of regional assistance that would not be on a favouritism basis but on the same basis as any other recipients, would it not? — the Budget did not provide for a once-only freight subsidy grant such as we had been promised. Mr Meates said that when the $500,000 was not paid he did not make any complaint to Mr Kirk in writing. Nor did he take it up with Matai board and insist that the board look into it and make a complaint.