Page 3429 - Week 09 - Thursday, 21 August 2008
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
So everybody had a role.
One of the interesting bits of evidence—I think it is fairly crucial to the way that the discussion around Rhodium went—was that Actew, as a territory-owned corporation, could see the implications of the Auditor-General’s report for its own activities. It had some legal advice prepared, and that legal advice contradicted the Auditor-General, who said in her report that there had been a lack of clear direction from shareholders.
I think this was borne out by Mr Stanhope’s comment in the hearing when he said that the shareholders had “a disinclination to hasten” and his tendency and his very direct laying of blame at the feet of the chief executive officer of Rhodium. The chief executive officer herself pointed out that there had been a disagreement, she believed, between the shareholders, who at that time were Mr Quinlan, as the Deputy Chief Minister, and Mr Stanhope. You will be aware that Mr Stanhope remains a shareholder and that Mr Quinlan’s role has been taken up by Ms Gallagher as the existing Deputy Chief Minister.
There were different views and different aims for the company. The chief executive officer—who, remember, had been employed by Totalcare, which was the parent company, just six weeks before she was given the job as CEO of Rhodium: an appointment, I might add, which was renewed twice—believed that her task was to grow the business. She justified her actions in terms of investment in the business. She believed, “You would not see returns until later, would you? It will be down the track.” The trouble was that other people did not share that vision of Rhodium.
The board seemed to go along with the chief executive officer’s aims for Rhodium and seemed to get quite a surprise when the chief operating officer went to the board in February and told the board that the chief executive officer had behaved inappropriately—had drawn an advance from Rhodium and had not yet paid it back. It is of concern to the committee that the board did not seem to really know what was going on. It is of concern to the committee that the shareholders did not demand more of the board and, through the board, the chief executive officer.
So the committee’s interpretation of the legislation was quite different from the legal advice that Actew had obtained. I should add that Mr Stanhope relied very strongly on that legal advice as well. He used that legal advice—not that he had it during the main years that Rhodium was in existence. He did not have that legal advice; what he had was the legislation. And the legislation, in the opinion of the committee, makes it very clear that there are very strong roles for the shareholders.
We were really concerned that the Territory-owned Corporations Act did not seem to have been really taken on board by the shareholders. The shareholders are the representatives of the government in the direction of a territory-owned corporation, and as a government they are meant to be acting in the best interests of the territory. According to the legislation, the shareholders do have ways in which they can direct a territory-owned corporation. Section 17 of the act reads:
(1) If—
(a) the voting shareholders of a territory-owned corporation request it or a subsidiary to perform, cease to perform or refrain from performing an
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .