Thursday, 24 January 2013

Learning to fish

Ok so to recap – since 2009 Ngati Awa have lost $5.2 million in two separate investments.

Now fast forward to the present day and in the last year seven people were made redundant from their jobs with Te Runanga o Ngati Awa, the chief executive role changed hands three times, our asset base has dropped from $111m to $110m and the return on our assets was 2 per-cent.

Not exactly a glowing annual report really and at the AGM our leaders tried to put the poor performance down to the tough economic times.
They said it’s to do with the GFC, that’s Global Fiscal Crisis to those fortunate enough to not have heard the term before, and that America is about to hit the financial “Cliff”. They said the recession has taken its toll and businesses are struggling all across the world. They said they have been here since the beginning and if someone else thinks they can do a better job then let them.

Well, let’s be honest now that is simply rhetoric used to confuse people. What I really want to know is what is going on in Te Runanga o Ngati Awa?
This week I sent the chief executive of the runanga and its financial, Enid Rātahi-Pryor, an email. I thought if I was going to talk about the runanga in such a public forum then I should at least seek the opinion of our leaders.

I wanted to start with the chief executive because she was the one that made the bold statement that the role of NAGHL, the financial arm of the runanga, was to create wealth not jobs.
Her response to my email outlined a plan to attend as many hapu meetings that she could “in an effort to help decipher and demystify Runanga information and accounts”.

She said she was putting a request forward to attend the my own hapu meeting at Wairaka Marae, to be held next month, via the representative in an effort to respond to concerns expressed in this blog.
“I will have written responses and reference documents to all of the questions that you seek answers to below for presentation at any hapu hui of the 22 hapu of Ngati Awa.  By the end of February a full response to all of your questions will be made available to the hapu representatives for dissemination to hapu members,” she said.

And while Mrs Ratahi-Pryor must be commended for her desire to attend the hapu meetings and provide answers, her response made it clear I would not have the information for this blog post.

So, in preparation, I scanned the internet and the annual reports to see what information I could find in regards to the role of the runanga and its financial arm. And to be honest there was very little to be found.

On the runanga’s website it quotes chairman Te Kei Merito outlining the tribe’s aspirational goals.
“We have achieved much over the past years, however there is still much to do – we need to continue to build on the legacy left by our tipuna, and past leaders. Vision Ngāti Awa is an important part of this process. This project collates all the different aspirations and visions of ngā uri o Ngāti Awa into one unified vision.”

But haven’t we heard all of this before, the aspirational goals have long since been identified, what I really want to know is how are we going to achieve it.
And therein lays the problem. As far as I can see the roles of each organisation do not seem to be clearly labelled and there do not seem to be any obvious plans about how we are going to grow the iwi. I could not find any mention of business plans, or of a social development strategy and it seems that our leaders are more concerned about where their offices are to be located than they are about future development.

If we do not have clear strategies and plans going forward we will starve the economic growth of the iwi. Simply put if we do not invest in development, we will not grow and if we do not grow, we will not be able to sustain our people.
At the moment the increase in our assets since we signed the treaty settlement has been mostly natural. Think increasing land values, bonds and fixed-term interest accounts.

And this concerns me because the runanga’s goal shouldn’t just be about money, numbers or asset values, it should be about the well-being of our people.
We should be using our tribal assets to grow our economic base with an eye to providing jobs for our Ngati Awa uri so that they can live in our tribal rohe.

It is as the old adage says: Give a man a fish you feed him for a day, teach a man to fish and you feed for a lifetime.

What we need is ideas to create wealth and build jobs at the same time, not investments in whimsical golf courses or forays into internet technology.
This will come if we can develop strategies that suit us as a people and I am hoping that Mrs Rātahi-Pryor will come to the Ngati Hokopu hui next month armed with some ideas on how we can do this.

Next week I will talk about the Mataatua Wharenui and almost $200,000 spent on consultants to investigate an option of putting in a gondola from behind Te Manuka Tutahi marae to Kapu-te-Rangi.

Thursday, 17 January 2013

Golf courses, housing developments and four letter words


So starting from where we left off in the last post - Birnie Capital.
Founded by a man named Bill Birnie, Birne Capital Property Partnership (BCPP) was described in an article in the National Business Review as “an investment vehicle for several large-scale property developments in Northland”.

More specifically it was the company with which the executive board of Ngati Awa’s financial arm, Ngati Awa Group Holdings Ltd (NAGHL), decided to invest $3.3 million in to develop an international-standard golf course.

Ngati Awa was joined in the investment by other interests including Auckland businessman Allen Peters for a total of $17.25m while Mr Birnie borrowed a further $6.5m from BNZ. The plan was to buy land on Kawau Island to develop the luxury golf course and a housing development.

The property assets included the purchase of Lion Rock Golf Course and Lion Rock Development, both owned by Mr Birnie, which were the two companies that had gained consent to build the development.
An agreement between the investors and Mr Birnie contained an option for BCPP to transfer back the Lion Rock assets if a further conditional agreement between John Paterson & Co and Mr Birnie for the sale and purchase of certain land didn't eventuate.

In September 2009, Paterson & Co decided not to sell. At about the same time a valuation report on Lion Rock development considered the development of the project would require an additional investment estimated at between $61 million and $70.115 million plus GST.

The project was abandoned and Ngati Awa wrote the $3.3m investment down to nil.

In 2010 Ngati Awa and Mr Peters went before the High Court seeking to invoke the right to “put back” the assets purchased by BCPP from Lion Rock.
The two parties claimed Mr Birnie and his associate Stephen Norrie breached fiduciary duty by voting against the exercise of a put option that would force the return of $19m.

However before the hearing was heard in the High Court an offer of settlement was made by Mr Birnie to pay NAGHL and Mr Peters $3.55m in three instalments over four years.
Ngati Awa accepted the deal but at the AGM last year runanga accountant Murray Haines admitted that to-date no money had been received from Mr Birnie.

He said legal action against Mr Birnie would continue but a $1.57m doubtful debt provision had been set up because of the uncertainty about receiving any money from him.
The facts, to which I have laid out for you here as best as I know, highlight the NAGHL executive board chaired by former civil servant Sir Wira Gardiner appears to have done very little research when deciding to invest $3.3m of the tribe’s money into the development.

Again I am left to ask what sort of due-diligence was completed before the investment was made?

Surely, if the project needed a further $40-$50m to be realised then the investment was flawed from the beginning. And why did the executive board decide to invest in a development in Northland when Ngati Awa’s traditional tribal boundaries are in the eastern Bay of Plenty?
In my opinion, the investment just doesn’t seem to make any sense at all retrospectively. 

Perhaps that is why Sir Gardiner chose to use that four-letter word at the AGM last year after several questions about NAGHL’s performance were asked.

Sir Gardiner also said the iwi shouldn’t be surprised about the $3.3m write-off because it has been in the tribe’s annual reports since 2009. But personally I think that it shouldn't be swept under the carpet because it is  historical. Surely there are lessons to be learnt. What do you reckon?

Next time I will discuss the statement made by Te Runanga o Ngati Awa chief executive, Enid Rātahi-Pryor, that NAGHL’s role is not to create jobs it is to create wealth.

Tuesday, 8 January 2013

Tuatahi


Kia ora koutou,
On Saturday the 8th of December, 2012, I attended the Annual General Meeting of Te Runanga o Ngati Awa (TRONA) in Te Teko.

I went because I wanted to know the answers to several questions I had and to hear what our leaders had to say about a couple of key decisions they have made in the last year or so.

However answers were not very forthcoming and I left the meeting with a sense of disappointment, in response I decided to start this blog.
Through it I am hoping to share information and pose questions in a bid to acquire a better understanding of our tribe’s affairs.

Belonging to Ngati Awa will make being detached and unbiased difficult however I am confident the news values and ethics that I gained as a reporter will ensure that I strive for fairness and balance.
For more than four years I worked as a reporter at the Waikato Times. My speciality was Maori Affairs and for much of my tenure I was heavily involved in the tribal politics of Tainui as an outsider.

I wrote several stories where my contacts questioned the decisions of the tribe’s leadership and there were some who were angry that I chose to put the tribe’s affairs out in the public.
But here is the thing - I always believed that my job was to provide information to the people so that they were able to make informed decisions and it is this same drive that I employ when beginning this blog.

Since returning to live in my hometown of Whakatane I have been saddened by several people’s stories about their experiences within and with the runanga

In the past people from Waikato have often asked me if I would be so intrusive when it came to my own iwi and now I am finally able to answer that question with this honest answer: yes I am because I believe that to achieve collective success people must always demand accountability and transparency from their leaders.

This will only happen if the people have the information to make informed decisions.
So I will begin this blog with a post about what I believe was one of the most interesting aspects of the AGM.

TRONA chairman Te Kei Merito began the meeting by asking those gathered to highlight any issues that they would like to raise in the general business section. Several people stood up including my whanaunga William Stewart who said he wanted to talk about accountability.
It seems that this statement was to set the tone of the meeting.

Reports were given by the new chief executive Enid Rātahi-Pryor, TRONA chairman Mr Merito, Ngati Awa Group Holdings Ltd chairman Sir Wira Gardiner but, in my opinion, the most interesting point of the meeting was when TRONA accountant Murray Haines was asked how much had the runanga had received from the sale of GoNet.

An internet service provider company, GoNet promised great things. In 2009 the runanga invested iwi money into the venture and it was hoped that they would be part of the roll-out of the cutting edge technology, InspiAir.
However the promises made by the Tanekaha Holdings Ltd, the company which first approached the runanga for investment into the internet company, were a little premature and the network required a bit more tweaking before it could offer the fast and reliable wireless internet that had been ensured.

After it was discovered that the technology did not live up to the promises the runanga sacked Tanekaha Holdings and employed another company to find gear that worked and to get the network working. It is estimated that this cost the runanga $1m taking the total investment into the venture to $1.9m.
In addition the runanga also had to absorb a trading loss of $400,000 for the 2011-2012 financial year and so a decision was made to get out.

Therefore in last year’s annual report the investment into GoNet of $1.9m was written off and a trading loss of $400,000 for the company was recorded.
When asked how much money was paid for the shares, Mr Haines had to reply that the runanga had sold the shares back to GoNet for nothing.

This sparked outrage by some in the wharenui and Mr Haines replied that the runanga had made the decision to stop the haemorrhaging of funds.
“To stop the bleeding we sold it for $0, we got rid of the haemorrhaging. Sometimes it is sensible to give away something for free,” he said.

Mr Haines went on to say from accounting point of view it was hoped they would recoup some of the $1.9m but it was generally accepted that this would probably not happen.
However this did not alleviate concerns in the crowd of about 80 people and many were left speechless.

And perhaps this would make sense if Ngati Awa was a two-bit player but we are an organisation with $110m worth of assets. We are a proud people with a history of entrepreneurship and creativity. We have a host of people within our iwi with skills and qualities that could have helped provide a better solution than simply giving away an investment of $1.9m for free.

It begs the questions of: what kind of due-diligence was done before our leaders chose to invest in this internet company? And secondly, why spend money fixing the network if we were only going to give it away for free?
It is not the only investment the runanga has made where I have been left to question the decision-making abilities of our leaders.

In the next blog post I will look at the Birnie Capital situation where our leaders chose to invest $3.3m to help build a golf-course up north. The venture failed, the runanga wrote off the investment and now they are currently involved in an on-going legal battle to get back half of what was lost but it was admitted at the AGM that there is very little likelihood of us getting back that money.

Thoughts?