Caygill grilled by Nats over BNZ changes

Press, 23 February 1989, Page 6

Caygill grilled by Nats over BNZ changes

By

PETER LUKE,

political reporter

The Minister of Finance, Mr Caygill, yesterday faced an Opposition grilling, as he defended his role in the recent BNZ board changes.

The Opposition alleged that the removal of the former chairman, Sir Ron Brierley, and former deputy chairman, Mr Rob Campbell, were prompted by policy differences. These differences concerned the sale process for the BNZ, particularly the access potential buyers ought to have to bank records, including confidential client information, the Opposition said. During a vitriolic snap debate Mr Caygill was accused of breaching a section of the BNZ Act which stated that the Government shall not give representations or directions to the board relating to customer accounts. The Opposition’s associate finance spokesman, Mr lan McLean, charged that the newly-announced chairman, Mr Frank Pearson, and his deputy, Dr Susan Lojkine, were “not good enough” for the

job. The Opposition and Government accused each other of jeopardising the financial stability of the BNZ. Mr Caygill, at Question Time, faced up to five of the first six questions, including three on the BNZ. The snap debate was sought by Mr McLean. In response to two questions, Mr Caygill denied that Mr Campbell had quit as acting chairman because of policy differences, or that he or his predecessor, Mr Roger Douglas, had given the BNZ any “instructions” this financial year. In an attempt to refute this, Mr McLean cited statements made by Mr Brierley last week, and by Mr Campbell this week suggesting policy differences. He quoted a letter, later tabled by Mr Caygill, saying that the Government “wished” that the board

would make “full and prompt disclosure” of information needed by potential buyers. During Question Time Mr Caygill reaffirmed the Government’s commitment to provide “equality of treatment” to all tenderers for Crown equity, including the BNZ. He claimed that the wording of the letter he tabled did not amount to an instruction. This interpretation was rejected by the Leader of the Opposition, Mr Bolger, on the ground that a “wish” by an 87 per cent shareholder was tantamount to an “instruction.” Mr Caygill said that legitimate questions had arisen about the BNZ’s state of affairs, especially losses sustained through the sharemarket collapse. The situation required “a fresh start,” consideration of the circumstances, a degree of public disclosure and assurance for

customers and staff. He had invited Mr Brierley to step down as chairman because his other commitments did not leave sufficient time for the board’s affairs. On Tuesday morning this week he informed the acting chairman, Mr Campbell, of Cabinet’s approval of Mr Pearson and Dr Lojkine as chairman and deputy chairman. The implication of this conversation was that he (Mr Campbell) was being asked by Cabinet to step aside as deputy, said Mr Caygill. “He chose to deliver a letter purporting to resign.” This was partly "a device” allowing Mr Campbell to express his views on the BNZ’s future, Mr Caygill said. The debate included bitter exchanges across the House, with Mr Caygill frequently described as “muddled” or “weak.” “I would not have

thought it a weak action to ask Sir Ron Brierley to step aside as chairman of the board,” he replied. Government members condemned the attack made on Mr Pearson and Dr Lojkine, and Mr Caygill claimed that Mr McLean had raised "the spectre of a run on the bank” for political reasons.

Mr McLean emphasised the pivotal role of the BNZ in this country and the effects a lack of confidence in it could have on small savers, main institutions and staff morale.

He defended Mr Campbell’s reluctance — as cited in the tabled letter — not to disclose any confidential information “to all and sundry who might be interested in buying and eventually might not.” “The Minister has met his first crisis in office and failed utterly,”