Urgent Debates — Tranz Rail Shares—Insider Trading 
Urgent Debates — Tranz Rail Shares—Insider Trading 
[Volume:640;Page:9950] 
Urgent Debates 
Tranz Rail Shares—Insider Trading 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. We learnt the other day that the Securities Commission was able to get out of one David Richwhite $20 million and from a number of others sums of up to $7 million in respect of a transaction in 2002 where insider trading took place. What is important about that is that this is the first time two gentlemen—Sir Michael Fay and David Richwhite—have ever been investigated in this country in terms of their commercial behaviour. 
 In fact Michael Fay had the effrontery to put a case before Parliament which the Parliament was happy to entertain by way of a defence of his behaviour and it is now part of the parliamentary record. For example just 2 weeks ago I saw at the back of the  
New Zealand Herald 
 
an article totally exonerating Michael Fay. Now how weak and insipid and corrupt can the newspapers of this country be when they set out to make a defence for a person who even then within 2 weeks because of his associations would be found to be guilty of what is nothing but a fraud on his fellow investors. 
Bob Clarkson 
: It was not fraud. 
Rt Hon WINSTON PETERS 
: Oh yes he is guilty as sin. Why do you think he paid $20 million? Because he is innocent? I know why that member would not know anything about guilt; that is the way he does business. He is trying to do it right now in getting the ratepayers of Tauranga to buy out his complex over there. 
Hon Members 
: Oh! 
Rt Hon WINSTON PETERS 
: Exactly! Oh yes he is. Perjury—well we know all about that do we not? Perjuring oneself before a court—we have heard all about that and that is why he will never understand. There is the biggest defender of the behaviour of David Richwhite and Michael Fay sitting in this Parliament and he should be ashamed of himself. Over half a billion dollars was extracted by these men from the taxpayers of this country and this is the first time that officialdom has investigated them. 
I want to congratulate the head of the Securities Commission and her staff on at last 18 long years later doing something about these people who are held out to be paragons of virtue but who are nothing but crooks—and cheap crooks at that. Do we not remember the first transaction? They got themselves 30 percent of the shareholding of the Bank of New Zealand in June 1989. It never went to the market; it just went to them. Then there was the bail-out of November 1990. The National Party was barely in power and it was asking the taxpayers for a billion dollars to bail out the Bank of New Zealand which was owned by the people of the country and 30 percent owned by that time by Fay Richwhite and Co. 
If that was not bad enough there was the Adbro deal where all the bad debts were farmed off and then because the only two shareholders would be the Government—via the bank—and Fay Richwhite what did those people do? They paid themselves a finders’ fee. They paid themselves a finders’ fee—a finders’ fee for a fully subscribed company—and Ruth Richardson and the National Party did that. Disgraceful! It makes Donna Awatere look like an angel. That is the stink and the stench that this Parliament has tolerated. One party in particular has attacked the beneficiaries of this country and has sounded high and mighty about Donna Awatere—but there those members were covering up for their mates and paying a finders’ fee. If that was not bad enough on 20 July 1993 they sold the railways of this country which were a century old for a lousy $328 million. Three hundred and twenty-eight million dollars! That did not go to the market either. 
 A year before Fay Richwhite and Co. were the advisers and then in April 1993 Fay Richwhite jumped across the table and said: “Hello we act for the buyers.” What does one call that? It is grinding corruption. A political party across the House—namely the National Party—condoned it and those members have the effrontery to now come to Parliament and say that they should be in Government. Within the space of just 24 hours when the market heard about the price the share price jumped $188 million. That is what they gave to their mates. But it did not stop there. When it was known what those people were doing as the owner of a business out of the Cook Islands they began the cover-up. That is why today this Parliament should debate this issue; and whilst it is debating it pray tell me why people like Bill English and his ilk are fit to be in Government if they would condone that. They have never ever criticised it and worse than that they actually decided to enter a campaign of character assassination against someone who was asking questions from Parliament about these people. They even had the effrontery to kick me out of the caucus. Can members believe that? They booted me out of the caucus because I was saying that that outfit stank and they should not be covering it up. 
On and on it goes and today here they are the same old faces in the same places. Members should read  
The Hollow Men 
. Who is back? All the people who did that—the people who supported Michelle Boag and others. Those same men are in behind those people over there and the disclosure in  
The Hollow Men 
 is their own disclosure. 
Bob Clarkson 
: What about the overspending? 
Rt Hon WINSTON PETERS 
: Number one I did not lie about my electoral returns did I? This man said his was $10000. A very sympathetic court said oh no it was not. It was more like almost twice that. But I say he spent $80000 and I still believe he did. If he can get up and say that because he has some business mates he can get lesser rates than everybody else in New Zealand then he has breached the spirit of the law of this country and he knows it. 
Hon Bill English 
: I raise a point of order Madam Speaker. [ 
Interruption 
]  
The ASSISTANT SPEAKER (Ann Hartley) 
: We are hearing a point of order from the Hon Bill English. 
Hon Bill English 
: It is not in order for a member to refer to another member as telling lies. In fact this whole matter was thrashed out before a court and in the House Mr Peters is obliged to accept the result of the court proceedings even if he does not believe the member. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The matter was really irrelevant to this debate. I was listening to the member. He was talking about a court case; he was not making accusations. 
Rt Hon WINSTON PETERS 
: He had the effrontery to treat me as though he was looking in the mirror. He said I was corrupt and I am not going to take that from a little hoon who has been here 5 minutes and whose public behaviour and past misbehaviour has been scandalous. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member will please be seated. The member knows he cannot refer to other members in those derogatory terms. 
Rt Hon WINSTON PETERS 
: I apologise but the point is that he is the last person to raise this issue; and second everyone in this country knew and every political party knew including the National Party that one had to have a declaration on costs that was fair and actual not some mate’s rates—one-tenth of the cost I am paying—and that is how he did it. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Please be seated. 
Hon Bill English 
: Point of order. 
The ASSISTANT SPEAKER (Ann Hartley) 
: No please be seated. I just say to the member that he needs to come back to the debate on this matter. 
Rt Hon WINSTON PETERS 
: The point I am making is that here we have after all this time since 1989 the first investigation by officials of this company Midavia Holdings and two men—David Richwhite in particular but the investigation includes Michael Fay. And what do we get? A strike. In the first investigation they have been found to have misled the shareholders—to have robbed shareholders in fact—and to say there is no guilt is really just nonsense. Their experience has been to take political parties—and one party in particular—and get alongside them with huge donations then have their way with regard to the assets of this country built up by the New Zealand people over a century. 
Darren Hughes 
: That’s right. 
Rt Hon WINSTON PETERS 
: That’s right. Who gave Fay Richwhite a special Telecom deal in 1993? Who gave Fay Richwhite the special Telecom deals robbing the country blind in 1993? I ask members to guess which party did that. 
Hon Members 
: National. 
Rt Hon WINSTON PETERS 
: National. Who sold New Zealand Rail for a bargain fire-sale price on 20 July 1993? Who tried to cover up the exposé of these people’s behaviour when out of the Cook Islands they constructed the law and set out to rob the Treasury of New Zealand Australia and Japan? Who did that? I challenge the next speaker of the National Party—and I hope it is Bill English—to get up and apologise for the way that that party aided and abetted this criminal activity for criminal it was. 
Hon Bill English 
: I raise a point of order Madam Speaker. [ 
Interruption 
] 
The ASSISTANT SPEAKER (Ann Hartley) 
: There will be silence during points of order please. 
Hon Bill English 
: No member of the House is allowed to accuse any other member of aiding and abetting criminal activity. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is correct. I ask the member to withdraw and apologise. 
Rt Hon WINSTON PETERS 
: I withdraw and apologise Madam Assistant Speaker. Let me ask members this question: who if he or she were acting in the interests of the New Zealand people would lease the rail track for $1 a year? I ask members where in the world one would see a group of people who would lease the whole nation’s rail track to these business people. Do I have 5 more minutes Madam Assistant Speaker? 
The ASSISTANT SPEAKER (Ann Hartley) 
: Five more minutes. 
Rt Hon WINSTON PETERS 
: Thank you Madam Assistant Speaker. It should be 5 more hours—I have enough material on these people. The fact of the matter is that the rail track was leased for $1 a year. Who did that? It was the very people sitting over there saying they should be the next Government of New Zealand. 
Jill Pettis 
: And they’d do it again! 
Rt Hon WINSTON PETERS 
: And they would do it again. That is the tragic thing about  
The Hollow Men  
and all the emails that Nicky Hager somehow discovered for they disclose that these people in the National Party have learnt nothing and would go down the same road of privatisation again. That has to be a party with a split personality because the very thought of doing that must offend so many National Party supporters and people who have been in the National Party for a long time. It is an effrontery to the party’s history to act in such a treacherous way when it comes to the interests of the New Zealand people and the taxpayers of this country. So I want the next National Party speaker to get up and explain why the previous National Government when all this rotten conduct was going on in business did not even raise a finger. 
Hon David Parker 
: Capital Markets—what did they do there? 
Rt Hon WINSTON PETERS 
: Well Capital Markets was the combination of the BNZ and Fay Richwhite and another very wealthy guy called Brierley. They owned one-third each and it was a company in the Cook Islands that was setting out to rob blind the New Zealand Treasury the Japanese Treasury and banks and the Australian Treasury. 
Hon Parekura Horomia 
: How much did they get when they flicked it on? 
Rt Hon WINSTON PETERS 
: Well that is amazing you see because we have people who say: “I should be the next Minister of Finance.”—that is Bill English. Well perhaps he can explain in the background of that treachery what on earth qualifies him to ever be trusted again. That is the point. As soon as he had the chance last time after we had been in Government he upped and flogged Contact Energy did he not? That is why we pay the electricity prices we pay today because they always— 
Hon Bill English 
: No. 
Rt Hon WINSTON PETERS 
:Yes he did—1 October 1998. The member should get his facts right when we have an argument. That is what he did. All I am saying is I am glad that at last for the first time in 19 years some official and her staff who deserve all the praise did something about it. And the first time they did it they got a strike. As for the heads of the Inland Revenue Department I say they are a disgrace to this country and the present head of the Serious Fraud Office in my view is a disgrace as well because in his 10 years in the job he has failed to even do a thing about this. Oh yes he can jump in in a below-the-threshold case like Donna Awatere’s which was way below the threshold of $500000. Oh yes he can do all that. But he would not raise a finger against these over-mighty subjects of New Zealand who have spent most of their recent life offshore. 
Hon David Parker 
: Wouldn’t even pay taxes! 
Rt Hon WINSTON PETERS 
: That is right—in places where they do not pay any tax at all. I have a note here. I cannot really read it to members. It is just one line: “How greedy can these b’s be?”. The answer is that they had an insatiable greed. In satisfying it they corrupted New Zealand politics and New Zealand politicians and there is no way out of it. That is a fact. So the next National speaker can get up and tell me why National involved itself in the cover-up why it entered into a process of character assassination why it did all of that against the interests of the people of New Zealand and expected to get away with it and now it believes that it should be the next Government of New Zealand. Because the good book says: “By their deeds you shall know them.” It is as simple as that really. 
I am glad this debate has come up and I thank my parliamentary colleagues who have had the decency to prevail upon those who would shut this debate down because it is the first one we have had where these individuals have been taken by their behaviour to the point of having to admit their guilt—and guilt it is! 
DARREN HUGHES (Junior Whip—Labour) 
: 
 It seems to me that Mr Peters has really only just skimmed the surface of this topic and I seek leave for a further 5 minutes for the Rt Hon Winston Peters to continue to address this very important issue for the House. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member knows that he cannot seek leave on behalf of another member. The member himself can seek leave. 
Rt Hon Winston Peters 
: I will seek leave then. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is seeking leave for another 5 minutes of speech. Is there any objection? There is. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I am very happy to follow the Rt Hon Winston Peters and I thank him for giving Parliament the opportunity to focus its attention on one of the most outstanding results that this country has ever seen from our Securities Commission. I want to place on record the congratulations of this House to the Securities Commission on not giving up the fight—and let me just say that it was a fight. There were interests out there who did not want these defendants to be pursued; at one point I felt that those interests did not want the defendants to be pursued at any cost. So I want to place on record my congratulations to Jane Diplock and the entire team at the Securities Commission on having the guts and the gumption to take on these very strong powerful interests in our country. 
This settlement not only represents the greatest settlement in New Zealand history—when we take into account the fact that other defendants have already made a contribution to the total bringing it to $27.7 million—but also represents the greatest result in Australasian history. It really does put Australasia on the world map in terms of hunting down those who take advantage of inside information. If there was any example of why this Government has been so determined to get the legislative framework right for our securities markets then this would be the case that proves the point. 
I make the point too that although no liability has been accepted on the part of these defendants I think that Bruce Sheppard from the Shareholders Association summed up the public reaction with the words “Yeah right!”; “Yeah right!”—that is how the public have responded to the assertion that there is no liability in this particular case. The issue of $20 million coming from Midavia Holdings and from David Richwhite certainly poses that question very significantly. 
I do not want to dwell very much on the particular details of this case; the Rt Hon Winston Peters has traversed them with great eloquence already in this House. I really just want to reinforce how important it is that investors know that people who have inside knowledge cannot use that knowledge for their personal gain or for the gain of their friends and associates. This is a very powerful conclusion that one can draw from this particular case. 
I remind the House that when this Government took office in 1999 we said that four things needed to happen in respect of securing the kind of future that we wanted for our capital markets in this country. The first one was that we needed to have a Takeovers Code that had some teeth and was able to be implemented by the Takeovers Panel. The previous National Government had set up the Takeovers Panel and left it with nothing to do. Every year it reported a blank page—signed off a blank piece of paper—because it could do nothing. This Government brought in place the Takeovers Code. We were able to give the Takeovers Panel some teeth and it has had some very successful results from the work that it has done after this Government gave it the teeth it needed. 
The second area was of course reviewing our securities markets legislation. That was long overdue in this country and it was implemented by this Government. The third area that this Government worked on was this very area of insider trading and market manipulation. Members on the other side of the House should look downwards in shame as they recall their opposition to strengthening the laws around insider trading. I have to ask myself why they were so adamant that we should not strengthen the law in the area of insider trading. I think we have found the answer to that question in this House today. 
The fourth area of work that we are undertaking is in fact the area of work that I am announcing this afternoon and that is the review of financial products and providers and the review of financial advisers—so covering the whole area of non-bank deposit-takers. It is another area where the Government will be able to provide some assurance around the quality of our financial markets. 
So this Government really has the track record that shows we are prepared to put appropriate rules and regulations in place. We have a relatively light-handed regulatory regime in this country and nothing about that will change with the announcements that I am making this afternoon. But it is important particularly as we go into our KiwiSaver environment from 1 July this year that the public know that they will be protected from this sort of behaviour. They need to know that our regulators will ruthlessly track down those who breach the rules. We would like to think that all conduct in our capital markets was conducted on an ethical basis but we actually cannot rely as we have found out in many cases on everyone operating at that ethical level. Those who cross that line will be tracked down they will be prosecuted and where under the circumstances it becomes reasonable to accept a full and final settlement without the acceptance of liability then so be it. The only thing we have really missed out here is in respect of the penalties. That was in relation to an earlier decision of the court that penalties could not be pursued because of the court’s interpretation as to the timing under the legislation. That matter is being resolved. 
I think that the Securities Commission came under a lot of fire for taking on these individuals and companies and again I pay tribute to its willingness to continue down that track. The vast majority of the $27.7 million settlement that has been reached with the exception of about $2 million which will be going towards legal costs and other expert reports or in other words over 80 percent of what is claimed—well in fact most of what is claimed; the balance of the $27.7 million after deducting the costs—will go back to reimburse the shareholders. So it will go back to the people who lost out because of the behaviour of the individuals concerned. I just make the point—and it is probably a relatively strong point to make—that the vast majority of this settlement will go towards reimbursing the shareholders who essentially took a bath while others had the equivalent of a hot shower. I think that is a fair enough description of what has happened in this particular case. The shareholders were the ones who missed out and they are the ones who will benefit from the Securities Commission’s dogged determination to get to the bottom of this matter. 
So again I place on record my congratulations to the members of the Securities Commission. It must be very pleasing to them to have achieved a settlement in this case. There were those who simply were not prepared to come to the party at any stage until essentially the eleventh hour. I am glad that we have this result and that we can now move on to ensure that the lesson is learnt. The lesson is that those who trade on inside information will be hunted down will be caught and will be held to account. 
Hon BILL ENGLISH (Deputy Leader—National) 
: 
 The events referred to in this debate and the payment of the fine by a number of people in addition to Mr Richwhite show the importance of having a strong regulator and the importance of having a strong regulator that maintains its independence from the Government at all times and in all cases. In this case it is easy to back the regulator for nailing some people to pay back a very large sum of money for something they should not have done and of course we should back the regulator. There are also any number of other circumstances where regulators have been set up and given a job to do. Unfortunately the Government is often less inclined to back other regulators when the result does not suit it politically and that has the effect of creating uncertainty and confusion. So when the Minister waxes lyrical as she has done I hope she will advise her colleagues in the fields of energy—in particular in the field of electricity—and telecommunications that this case underpins the importance of having a strong independent regulator. 
The Securities Commission has done a good job. It is too much part of the culture of business in New Zealand that people who are in business believe they can intimidate the regulator either by dragging out a case or by threatening to bypass the regulator by political means—by going to the Minister to get a different result. But it is very clear that there has been too much of a culture in that kind—as for instance in the Commerce Commission case against Carter Holt Harvey over that company’s misrepresentations on stress-tested timber. No one should be immune from scrutiny and business should take the ability of the regulator very seriously. I would offer a caution to my colleagues that when people from various industries wander into our offices criticising a regulator and saying how tough and unreasonable it is being that should be taken as a compliment. The response should not be to say yes to those people and to tell them that we will do something about it. That is not the answer. 
And where the Government has stood over a regulator such as the Electricity Commission that has led to confusion and uncertainty and to the need for considerable change. The Government kept saying to the Electricity Commission that it should do what it wanted and now the Government cannot replace anyone on the commission except with a Labour Party toady. Toadies are the only people who are willing to submit themselves to the political pressure on that industry that comes from the Labour Government. 
I conclude by saying that Winston Peters my colleague from New Zealand First made a number of allegations around the activities of these people and others through the 1990s. All of those activities were subject to the scrutiny of the law and at all times— 
Rt Hon Winston Peters 
: Rubbish! 
Hon BILL ENGLISH 
: Well the member says “Rubbish!”. He may disagree with the law and that is fair enough—you know law changes; sometimes it does not work as it should. But all the activities that he referred to were subject to the scrutiny of the law. Our legal institutions have always been as independent as they need to be—our regulators have not always been but our legal institutions have been—and these people were subject to that degree of scrutiny. Some of the matters the member referred to were subject to the scrutiny of a pretty wide-ranging commission of inquiry. It actually went on for a long time at considerable expense and what was surprising about the result of the commission of inquiry was that the conclusions were not exactly decisive on the matter. It was found that if sometimes the law had been at fault it had actually been applied. That is all that anybody can ask for. Parliament can expect that its agents such as the Securities Commission will apply the law—and in this case the Securities Commission has done so. Every person in business in New Zealand who is subject to our commercial law should be able to expect a fair hearing. In this case the people affected have had to accept a stiff penalty. 
Really the concluding comment I want to make is that the business environment in New Zealand will work well and will not be over-regulated if business accepts that regulators are the final decision makers—that if they have provisions for penalising businesses then they will use them and that on each and every occasion regulators will be backed by this Parliament. Nothing is worse for the regulator and nothing creates more uncertainty in the business community than for politicians themselves to undermine the regulators they set up by the legislation of this House. 
SHANE JONES (Labour) 
: 
 It is with a great deal of pleasure that I take this opportunity for a 5-minute call to be followed by a speaker from New Zealand First. I stand and support Winston Peters in highlighting the issue about two individuals Michael Fay and David Richwhite whom I regard as having done a great deal of damage to New Zealand’s business. Let us just think back to the 1980s and the 1990s when members of the media and members of the Government in the 1990s enabled Fay and Richwhite to think that they walked on water. Let us just focus on how they destroyed our rail transport industry. Once they gained access to the rail company they asset-stripped it. Not only did they pursue a strategy of having special dividends but they left it as a hovel. They left it hollow resonating with the name of the book that describes the actions of members of the other side of the House. The company was gutted and it took the State to then recapitalise it—and we can see how important that company is proving to be today in meeting our needs and our desire to transform the economy. 
Those two men having enjoyed the plundering of the public treasury then decamped overseas. One thing really grates with me is to hear that characters of their ilk have come back to Aotearoa—back to New Zealand—and have spoken and given lectures on how we need to improve the culture of business and our political culture when there have been no greater corporate vandals in my view than they were at their zenith. They had freedom—carte blanche. Not only did they pinch from shareholders when they went in but they robbed them when they went out. They were advising on certain deals so no doubt they had an opportunity to identify where the particularly rich pluckings were. They were able to jump on to the other side of the deal end up owning it and then pretend they had invented capitalism here in New Zealand. 
Hon Parekura Horomia 
: Then they sold it. 
SHANE JONES 
: No. What is worse is that they represented a betrayal of ethical standards that still haunts us today. Why do so many Kiwis have doubts about our capital markets? Why does the current chief executive of the sharemarket still struggle to build people’s confidence? People have not forgotten how these two individuals gorged for their own personal growth. 
I give full marks to Jane Diplock who really should go on to the Honours List. She should become Dame Jane; we should strip Fay of his knighthood and give it to her. At long last someone has identified a long route of wrongdoing. Yes these people squeaked out of the consequences of the wine-box inquiry but the cork having been pulled out of this bottle shows that the sludge of their wrongdoing has not been forgotten by us—not at all. 
These individuals actually own an island not very far from Hauraki: one of the Mercury Islands. No doubt it was funded by their affairs which were driven by their access to the public treasury. But given the vast periods of time they spend overseas and the shallow level of input they have not only to developing our own economy but to the country’s national pride and well-being I wonder why our regulators have not looked at whether they should be allowed to own that island. Are they actually fulfilling the citizenship requirements? No doubt they fled overseas in order to avoid tax obligations and to capture the full extent of their ill-gotten gains but in no way should they be welcome back in our country until they atone for their wrongdoing. 
Another thing that certainly bewilders me—but it does not surprise me given the price paid—is the raft of officials of that time and of professionals who either chose to defend the perfidy of those individuals or did not have the courage or indeed the resources to pursue them. Somehow we are meant to wipe all that away. It is no wonder that my colleague Lianne Dalziel over here has had to introduce a raft of proposals to improve people’s confidence in the capital markets the security law and other frameworks. 
Through this particular out-of-court settlement we are given a window through which to peer in order to see how things went wrong and to see how badly they went wrong over that period of time. On occasions out of this House when we have spoken about that period of time one thing irks. It is that Fay and Richwhite themselves and their many advisers refused to defend on any ethical basis the transactions they presided over. We should not forget that these people did not invent capitalism nor did they enjoy any larger degree of talent or education than others. What they had was an insider connection and that connection was ruthlessly exploited. After having amassed well over a billion dollars what did they do? They fled. How can we have any confidence that they have a place of pride back here in our country? [ 
Interruption 
] Yes as my colleague has just said they fled to a low-tax environment. But what is the impact of their actions at a time when we are struggling to introduce pride interest and enthusiasm in our people for civics values and aspiration? 
This decision is a timely reminder of what we must never do again. These two individuals—admittedly Richwhite’s name comes up the louder—have been caught and required to cough up. They are coughing up only a tiny percentage of what they ought to cough up. I am led to believe that their penalty is reduced to the period of time that elapsed before the regulator actually seized the moment and moved ahead to secure this decision. But folks should never ever forget what this bout of corporate vandalism has done to our reputation in terms of international business. 
No one enjoys more than I do I say to Mr Peters seeing people of enterprise and business have a go make an honest attempt and enrich themselves and their families. That is the way our country should be whether we are Pakeha or Maori. But that we should allow people who perceive themselves to be elitist and who enjoy privilege to prevail over us—the toilers the families and those in “Strugglers’ Gully”—to hoodwink us by pretending they are being done wrong by or to plant articles in the media about how aggrieved they feel because the country does not understand them! Oh we understand them all right! They exploited every avenue they had available to them not only to destroy confidence but to personally enrich themselves and no doubt a raft of advisers on the way. But the advisers only got crumbs; they were paid for the quality of their advice. 
But you know there must come a point in time at which people who portrayed themselves as being the architects of a new brand of capitalism to the rest of us in “Strugglers’ Gully” in New Zealand should give an account to the public as to the damaging effects of their actions. Do members know why those individuals are living overseas? In my view it is because they are afraid of their own shadows because those shadows remind them of what they did to degrade our country in the recent past. And none of it should rest easily on their spirits or consciences. Kia ora tatou. 
R DOUG WOOLERTON (NZ First) 
: 
 This debate is about a time in New Zealand’s history when we were described by other people from countries around the world—and some pretty big countries at that—as the Wild West of the new-rightist regime that was sweeping the world at that stage. New Zealand with Roger Douglas and Ruth Richardson embraced all of the craziness of that time and allowed the sort of thing we are talking about here today to go absolutely unfettered and unchallenged. One man Winston Peters stood up against that and said that what was happening was not right and his colleagues in New Zealand First—all of whom are here today and others who were here at that time—stood shoulder to shoulder with him during those times. This is something we are passionate about; it is not an academic exercise for us. 
I am proud to follow in the debate the chairman of the Finance and Expenditure Committee of which I am a member because in that committee even today we see the remnants of that time in the people who sit around that table—people from the National Party side—who hark back saying that those were the days that set New Zealand up for the future we are heading into now. That is simply not the case. 
These people did not create wealth. They were robber barons. They took money from other people. They did not put money into the economy. They did nothing to support the economy or to add to it in any way shape or form. These people took from the economy. These people took from parents and from grandparents. They were people who should not be admired yet one of them is running around with a “Sir” in front of his name. What are these people doing now? They have taken other people from that period in New Zealand’s history overseas and they have designed tax avoidance schemes for them so that they can enjoy residency in several countries at once never spending long enough in each of those countries to pay their full amount of tax—or any at all for all I know. From far-distant shores they still have the audacity to comment on New Zealand on its politics and on the person in question who held them to account. Sadly—and this is the worst part—they are listened to. They should not be listened to and they should not in any way be respected in this country. 
I can tell members something that my leader will not tell them. It is that he was not welcome in a country that we share close bonds with—a protectorate of New Zealand. That country is the Cook Islands and our leader was not welcomed there during those days. The power and influence of these people spread so far—and I am being careful with my words—that they almost corrupted that small group of islands. Nowadays of course people have come to see the error of their ways. Now when my leader goes to the Cook Islands I am proud to say that he is treated as a friend as family and as a respected New Zealander. But that was not always the case. He had to look people in the eye and suffer a whole lot of opprobrium before we came to that point. So this is just not right. 
These people have gone about their business in a most unsatisfactory manner. They have stolen from people in this country and they have been proud of it. They have tried to say that they were at the cutting edge of what is now called the new economy. I think it is a sad indictment on this country that we allowed that to happen. I am told—and I hear Bill English say somewhat apologetically that the law is not always administered as it should be—that the Serious Fraud Office under Charles Sturt gave only 32 hours’ consideration to this case. By comparison—if you want a comparison Madam Assistant Speaker—he spent exactly twice that on public relations defending himself and his office throughout the ensuing days. 
 I think that people need to know that we saw in those days the selling off of railways to business friends in what are called sweetheart deals. We saw the propping up of the Bank of New Zealand which Fay and Richwhite owned at that point to the degree of $600 million - odd. It was broke before that. They were net beneficiaries of that deal as well. So it is not right to say that the Government did not have any role to play in this. It is clearly something that the Government of the day chose to overlook because it suited it to do so. The required pressure that Governments should bring to bear on matters that do not smell right was not brought to bear in the deals that went on in those days. 
It was appropriate for the previous speaker to talk about Mercury Island in the Bay of Islands because as my colleague Ron Mark has said to me it is absolutely de rigueur if you like for pirates to live on an island—and in this case a treasure island it may well be. When people speak of the $20 million that they have had to shell out to make things right I do not see that as a punishment. I see that as being these people buying their way out of yet another problem. They are buying their way out of a difficulty. This is what they did back in the days when these things went wrong and sadly they are still doing it today. We should not accept $20 million as repatriation from these people. We should thank them for the $20 million and say that it will go some way towards the court costs that we will bring to bear on them over whatever period it takes to bring them to justice. That is what would happen to a normal citizen. That is what would happen to me and that is what would happen to my family and friends yet these people again are able to buy themselves out of trouble and it just does not sit right with us. 
My colleagues and I know personally what it has cost our leader in cold hard cash. He is not a wealthy man; with his family upbringing skill and previous occupation he should be. Who has ever heard of a poor lawyer? Yet we have one here. That is because he has pursued cases like this one to his own detriment. 
We are thankful to have this short opportunity to speak about these issues but I do not think we should accept that this case rests easily with us. We should not accept that this case is at rest now because we will continue to pursue it in whatever ways we can. We say that if they were any other citizens they would not get away with a $20 million repatriation but they would still be pursued to make justice right. Thank you. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Kia ora Madam Assistant Speaker. The Maori Party welcomes the initiative of Mr Peters in bringing this issue of insider trading to Parliament. We see it within the greater context of justice fairness and transparency—values we would expect to see right across the Government sector. Alongside the Minister of Commerce’s praise for the Securities Commission I believe it is important that this House also acknowledge the leadership that Mr Peters has demonstrated and also record our commendation to Bruce Sheppard of the Shareholders Association for his action in driving this case forward. 
We will support any moves that combat corruption and that ensure that standards of accountability and transparency apply. We are interested in the comments of the Shareholders Association which were inevitably very positive describing the final settlement in the Tranz Rail insider-trading case as a good result for the shareholders in the sharemarket. The Shareholders Association went further to note that the settlement shows regulations will be rigorously policed in larger cases. In this respect we in the Maori Party believe that the issue of accountability of following due process and indeed of ensuring that the process that is followed is an honourable one is timely in the context of the recent damning reports from the Waitangi Tribunal about the flaws and unprofessional conduct of officials in the context of the Treaty settlement process. 
This whole issue is about the devaluing of shares; an event that the Securities Commission has condemned in the way in which it suggested that the directors executives and the major shareholders of Tranz Rail had knowingly entered into a project that quickly headed into trouble. The millions of dollars that the investors have agreed to pay as compensation to shareholders brings justice for the shareholders who have lost money in this deal. We were interested in the comments of the Securities Commission chairperson Jane Diplock who noted that it is important that the sharemarket is transparent and fair especially when thousands of New Zealanders will be investing in it through KiwiSaver. She also said that it shows to the world that insider trading is being policed in this country. 
It reminds us of another investment venture that this Government has pioneered in terms of the context of superannuation funding. A couple of months ago in March this year the Auckland University Students for Justice in Palestine organised a march down Queen Street in Auckland to protest against the Government’s alleged unethical investment in companies producing nuclear weapons and cluster bombs. Demonstrators explained their action against the New Zealand Superannuation Fund because it funds investments in corporations that produce weapons like cluster bombs which have been used in Lebanon. But this protest also served to remind us all how absolutely hypocritical a Government would be to promote a non-nuclear policy yet at the same time invest in companies that produced nuclear weapons. 
The values behind this debate therefore of transparency accountability and justice must be the values that are applied to every sector of our Government. They must be applied in the operations of Government investments such as superannuation. They must be applied in the case of policies such as KiwiSaver and Working for Families which we know that New Zealanders do not benefit from in a consistent or fair way. It is a question of wealth and of how it can corrupt democracies. We must forever be alert to the possibilities and to those people who in the interests of accumulating more will use their economic influence to ensure a gain for themselves. 
The Maori Party acknowledges the advice of the Securities Commission that investors can be assured the sharemarket is a level playing field following the final settlement. We would only hope that that same fair level playing field is the concept across Aotearoa that we would hope to have meaning for for all citizens of this land. 
The Waitangi Tribunal has shown us this past week that the concept of a fair level playing field is not being played out between the Crown as controller and iwi. There is no regulator in the context of Treaty settlements. There is no Securities Commission that can bring a prosecution against an entity that unfairly disadvantages its own citizens—in this instance the Maori citizens of Aotearoa. The Maori Party looks therefore to the precedent of this case as another example that we can learn from in establishing an independent settlement authority or commission to truly achieve justice and perhaps even have the powers to prosecute. Thank you Madam Assistant Speaker. 
NANDOR TANCZOS (Green) 
: 
 This settlement I think will be greeted enthusiastically by New Zealanders all over the country. Many of us are still shell-shocked by the events of that time and we look back in wonder at the way that the New Zealand public and New Zealanders were ripped off by yuppy wide boys aided and abetted by the Governments of the day. We look back in amazement that that kind of thing went on and that it happened with the total connivance of the Government. So this development is welcomed as an indication that people cannot continue to get away with the kind of corruption—and I think we have to call it that—that we saw at that time with absolute impunity. They cannot get away with it scot-free. 
Nevertheless we have a fairly limited victory I guess because this is not a judgment of the court; it is an out-of-court settlement recognised by the court. The protagonists do not accept liability although we have to say that most New Zealanders think it is pretty obvious that there was insider trading. It is pretty obvious that we are talking about corrupt practice. As Mr Peters said if the protagonists were not guilty why are they giving the money? It is not because they have had a sudden change of heart and are stricken by an overwhelming concern for the well-being of those shareholders who lost out so badly. 
Why are they doing it? Actually it is quite interesting to look at the report in the media today. We see Mr Richwhite and Midavia’s lawyer Bell Gully partner Roger Partridge said: “It had been a commercial decision to settle the case. The case wasn’t set down to go to trial until the middle of next year. With the prospect of appeals on either side they could have been fighting it for another three years.” That is curious because appealing spinning the case out and keeping the court process going in order to avoid having to deal with the case has been the tactic used in the past. We have to look at the reasons now given and wonder in awe. We have to look in awe and in admiration at the sheer audacity of the kind of rationale that is being given. 
So this is not a judgment of the court; it is a settlement of $27.5 million - odd. Even though that is a limited victory I think we have to give our congratulations to the Securities Commission. We have to congratulate the commission because in the past there have been some stunning defeats of the Serious Fraud Office—and that has been referred to by members—and a reluctance to get into this kind of litigation. In a way that is with reason because there have been some real difficulties in the past. We have to give our congratulations to the Securities Commission on this settlement and on what is according to the media the biggest settlement in a case of this kind in Australasia. It is good stuff. I understand that this is the first time that the Securities Commission has taken court action against alleged insider trading. Although the penalties it sought were quite a lot higher than the settlement finally came out at it is still an important signal as I said that people cannot get away with this kind of outrageous rip-off with impunity. 
Nevertheless we cannot help but wonder a little about a couple of things. The first one arises from a comparison of the settlement with the estimated half a billion dollars that Fay and Richwhite made—personally gained—from a range of transactions as they ram-raided the New Zealand economy. It was estimated at half a billion dollars—and there was an estimated $277 million loss by the minority shareholders. So although this settlement is a victory I think we have to keep it— 
Ron Mark 
: We picked their pocket. 
NANDOR TANCZOS 
: Mr Mark said that we picked their pocket. I think we have to keep it in context. 
Ron Mark 
: We got their loose change. 
NANDOR TANCZOS 
: Yes that is right; we got their loose change. 
The other thing that I think is worth reflecting on is not just the financial loss but the enormous loss of potential that this country suffered as a result of these activities and the hampering of the development of New Zealand right until today. We still suffer the consequences of that. We suffer from the asset stripping and the deliberate destruction of the New Zealand rail service to this day. That is an ongoing debate but we have to recognise that finding the resources to make the infrastructural investment needed to get a functioning rail service in this country means we are talking about a lot of money—and we had it. That is the thing; we had it. The rail service was destroyed deliberately in order to line the pockets of these people. 
Of course the other company that Fay and Richwhite have been involved in was Telecom. The legislation we have had to pass in this House after years of going backwards and forwards about it to finally separate Telecom in one guise or another and to start to see the infrastructural investment that will deliver the information technology infrastructure that New Zealanders so desperately need and deserve is again another example of the way that the development of this country has been so seriously hampered by the practices of these people and I can only look at that with disgust. 
Finally my last comment would be to echo Dr Sharples’ congratulations to Mr Peters. Although we disagree with him and New Zealand First on a range of things I think we all have to give a vote of thanks to them for bringing issues such as the wine-box affair to the attention of the country and for persevering in getting this debate on the agenda today. We were not going to have this urgent debate and it has occurred only because Mr Peters persevered and sought leave. I give thanks to the House for not denying leave so that we have been able to have what I think is an important debate. I think that needs to go on the record. Thank you Madam Speaker. 
The debate having concluded the motion lapsed.