BNZ sale bid angers M.P.s

Press, 23 February 1989, Page 1

BNZ sale bid angers M.P.s

By

BRENDON BURNS

and

PATTRICK SMELLIE

Revised efforts to sell the Bank of New Zealand will be strongly opposed at today’s meeting of the Government Caucus.

Some Government members of Parliament last evening voiced anger that the BNZ appeared to be back up for sale this year after bids were rejected last December.

They learnt of the new attempt to sell the bank through the public row between the Minister of Finance, Mr Caygill, and the man he ousted as the BNZ’s deputy chairman, Mr Rob Campbell.

Yesterday the Opposition seized on Mr Campbell’s claims that Mr Caygill was trying to create instability with the sacking.

Mr Campbell had demanded assurances that the sales process would be stopped until the BNZ’s position was clear and that the bank not be sold to foreign buyers. Opposition members of Parliament repeatedly said during a snap debate in Parliament that Mr Caygill had jeopardised the financial stability of the bank by removing Mr Campbell and, earlier, Sir Ron Brierley, from its board.

Mr Caygill accused the National Party of causing the instability. Board changes had been necessary to give the BNZ a fresh start after the damage resulting from the 1987 stockmarket crash.

Mr Caygill made clear that the BNZ was again being steered towards sale, probably later this year. “The Government does not expect that the bank can be sold in a matter of weeks or even perhaps months,” he said. “I simply reaffirm our basic objective at this time is to see the board’s affairs, the bank’s affairs, put in such order as to enable a sale.”

Several Government caucus members were angered at this bald reassertion of plans to sell the BNZ.

Last December, bids for the bank were rejected by the Government when it announced the sale of Air New Zealand and Postßank.

Caucus members were left with the impression that it would be some time before any further attempt might be made to sell the BNZ.

Some irony was seen in the fact that Mr Campbell, a supporter of Rogernomics, had blown the whistle on revised plans to sell the BNZ. Mr Campbell had yesterday morning said the Government was responsible for problems faced by the bank. He said immediate assurances were needed from the Government on several fronts to protect its stability.

“The need for these assurances stems from the Government’s actions in respect to the bank, and does not reflect any inherent weakness in the BNZ itself,” he said.

The assurances sought included a halt to the sales process, that the bank not pass into foreign hands, and that Treasury not interfere in bank operations. Mr Campbell said he would hold a press conference later in the day at which he promised to elaborate on his concerns. These included a belief that it was a mistake to appoint Mr Frank Pearson as the new chairman and Dr Susan Lojkine as the deputy. But after a lunchtime meeting with Mr Caygill and the Prime Minister, Mr Lange, Mr Campbell cancelled the press conference. He said the meeting had agreed that the priority of the bank was its stability. His concerns would be pursued at board level, said Mr Campbell. Mr Lange and Mr Caygill had also agreed to examine them.

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