Two business heavyweights on a lobby group opposing the controversial Queenstown Airport share sell-off approved the constitution that allowed the sale.
Millbrook Resort developer Graham Smolenski and recently-retired Skyline Enterprises chairman Barry Thomas are founder members of the Community Strategic Assets Group.
The group is taking High Court action over Queenstown Airport Corporation selling 24.99 per cent of new shareholding to Auckland International Airport for $27.7 million, in June.
Defending its actions, QAC board chairman Mark Taylor has previously cited its constitution stating “the board may issue shares … to any person and in such numbers as the board thinks fit”.
This week, QAC released minutes under the Official Information Act to Mountain Scene showing Smolenski and Thomas were on the board which approved the constitution in 1996.
Smolenski says there was “no great reasoning” behind the insertion of this clause.
Mountain Scene: But isn’t a bit rich to complain about the deal after signing off the constitution that enabled it to happen?
Smolenski says the problem is QAC didn’t get full approval from shareholder Queenstown Lakes District Council, as required under the Local Government Act.
“These guys have chosen not to do the thing properly, under the LGA, and used the constitution in a way that was never intended.”
Smolenski says QAC “got cute” by changing its statement of intent this year, to say it “will consider the need for and sources of capital subscription as may be required”.
“It was an imperfect process,” he says.
QAC needed to have convinced council what it needed capital for and how it intended raising it, Smolenski adds.
Thomas also doesn’t agree the constitution gives QAC carte blanche to sell shares to AIA.
The clause “wasn’t put in for any specific reason”, he says.
“You generally prepare a constitution so that you try and cover reasonably broad possibilities that might emerge in the future.
“It may have been we wanted to issue shares or [make] other arrangements for a local float.
“It was not to look at outside [buyers].”
In the late 1980s, Thomas helped negotiate QLDC’s buy-up of the Crown’s 50 per cent share.
“I’m totally opposed to what they’re doing at the airport.
“I think they will rue the day because they’ll end up having to consult big brother before they want to do something, which is the very point that we didn’t want to get caught with.”