Cunliffe David: Financial Markets (Regulators and KiwiSaver) Bill Auditor Regulation and External Reporting Bill — First Reading 
Cunliffe David: Financial Markets (Regulators and KiwiSaver) Bill Auditor Regulation and External Reporting Bill — First Reading 
[Volume:667;Page:14300] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The Labour Party will be supporting this legislation to the select committee but it will do so with only the most intense scrutiny being applied at that stage. Many issues are raised by this very complex set of legislation but high in the minds of New Zealanders who are listening to this debate particularly those in the South Island will be the appointment of Mr Simon Botherway as chair of the establishment board of the new Financial Markets Authority which is set up under this legislation. That appointment has been called into question by the apparent failure of Mr Botherway to make a timely declaration of a possible perceived conflict of interest around his recommendation as chairperson of a Securities Commission committee to place Allan and Jean Hubbard into statutory management along with Aorangi Securities. 
It has further been a matter of surprise to the Opposition that the chairperson of the Securities Commission Jane Diplock for whom we have high regard excused that late declaration—and in our view partial declaration—on the grounds that Mr Hubbard’s association with South Canterbury Finance which had earlier put Mr Botherway’s brother into receivership was “ancient history”. Well how ancient was that history? 
Mr Hubbard tipped all his remaining assets in Southbury Group into South Canterbury Finance to ensure that equity holders did not lose their shirts. He tipped all his assets in and I understand that a matter of only a few days later a single anonymous letter of complaint was received by the Securities Commission. On the basis of that single anonymous complaint they took the unprecedented step of placing Mr and Mrs Hubbard and Aorangi Securities into statutory management thereby causing a collapse in the inflow of funds into South Canterbury Finance. 
The Securities Commission said they were not related parties because a legal opinion noted that at the time Mr Hubbard was no longer a director of South Canterbury Finance. Well technically speaking that is true but by a very short margin of time. But in practical terms the impact was the same: funds into South Canterbury Finance dried up; it received a credit-rating downgrade days later and the fate of that company was sealed. 
The Opposition believes that two things must now occur: first given the news earlier in the week that the Ombudsman is investigating Mr Botherway’s so-called declaration of interest we believe that Mr Botherway must immediately stand aside from the chair of the establishment board and should reconsider any availability should he not be completely exonerated from his suitability to chair the Financial Markets Authority. This is the senior regulator in the New Zealand markets. This is the position that must be beyond reproach upon which the reputation for the integrity and transparency of the entire market rests. If New Zealand does not maintain that reputation all New Zealanders will suffer. 
I regret to hear from a major broker of international investment into New Zealand that he will not allow offshore clients to invest in New Zealand registered vehicles; he insists they must invest only through Australian-based Australian Securities and Investments Commission regulated vehicles because he said: “New Zealand is the coldest banana republic in the world.” If that is the reputation of our markets in the ears of foreign investors how important is it that the chair-designate of the establishment board should have his name cleared— 
Jo Goodhew 
: 9 years of Labour’s stewardship. That’s how you left it. 
Hon DAVID CUNLIFFE 
: The soon-to-be former member for Timaru and Rangitata should listen up. I have had more emails from her constituents in the last week than she has had hot dinners. They are all saying the same thing—that they will never vote for her or her party again after the actions that this uncaring improper non-transparent National Government has taken in regard to South Canterbury Finance.