Meeting Comments

On Friday 10 November, the public meeting was held where people who have made submissions to the review were able to make oral submission. Well, with some restrictions . . some rules were imposed whereby presenters were allocated exactly 5 minutes, no new material was able to be presented, and no questions of the Trustees were allowed.

There is a great commentary of the proceedings in a following Bay Buzz e-newsletter . . . here >>

Only 11 people presented oral submissions. Two themes emerged. The first was criticism of the Trustees for their lack of communications with the Consumers about Trust actions. The second was criticism of the Trustees for providing no information to the Consumers/Beneficiaries regarding the benefits of the ownership options that are available to the Trust. That is, either the status quo and the future value of the dividend stream, and the alternative, the value of the share parcel that would be distributed to Consumers with that ownership option.

The Trustees are refusing to comment on the market value of Unison, or the value of the parcel of shares, and have a legal opinion which they are happy to hide behind. The legal opinion says that they don’t even need to consider that when deliberating on the ownership question. In our view that legal opinion is utter nonsense and should not be relied upon. The Chapman Tripp opinion relating to Eastland Network and the Trust Taieawhiti says quite explicitly that these value questions must be considered.

The show stopper at the meeting was the realisation that the Trustees are obligated, by a clause in the Trust Deed, to allow public attendance at any meeting where the ownership questions are deliberated. Just how the Trustees solve that issue before the meeting where they are supposed to announce their decision will be interesting to see. It should have been a fun week, but it wasn't!

By the way, the Secretary of the Trust commented to one of our supporters at the meeting that in his view Unison would have a market value of about $800M. That would make the parcel of shares worth about $13,000.

Why won’t the Trustees tell you?

Is it a Trustworthy Trust or a Secret Society ?

The last event of the was the Public Meeting where the Trustees “deliberated” in public, and then made the final decision. Of course they were unanimous in resolving to continue with Trust ownership of the shares in Unison.

Deliberated? Well, it was more like a charade. Many of the 25 or so public observers wondered what they had witnessed. Bay Buzz has a good commentary here . .

Chair Diana Kirton opened proceedings with a written speech in which she continued the expected propaganda, and even congratulated the Trust for the large growth in the number of written submissions this time [about 198], versus 21 at the last review in 2018. One has to wonder what the Trust really did to encourage that response. Shouldn’t the credit go to Free the Funds for raising the awareness and challenging the Trust over the last few months?

Well, Diana doesn’t think so. She takes Free the Funds to task for asking questions.

Free the Funds have never asked for a formal market valuation of Unison. That is unnecessary. We already have a pretty good idea, supported by opinions from leading executives in the electricity industry, and even from the Trust secretary. What we have repeatedly asked for was a view, opinion or estimate from the Trustees of the value of Unison. Did they ever respond? No! Instead they obtained a legal opinion saying that “the information did not exist”. Really? Normally one would think that Trustees who have a prime responsibility to manage the shares in Unison, on behalf of the Consumers, would have a pretty good idea of the value of the shares they manage. If the information does not exist then one can only assume that their minds are blank.

You would know that we have often quoted some excerpts from a legal opinion by Chapman Tripp provided to the Trust Tairawhiti, who owned Eastland Network prior to its sale in March this year. We always noted that the quotes were from a similar Trust owned lines business, and that we just used the Unison name where appropriate, rather than the original. These quotes were not specifically related to the Trust Tairawhiti Trust Deed. In fact they are interpretations of the legal requirements of the Trusts Act 2019, and hence applicable to any Trust. Nothing deliberately misleading there. One has to wonder why the Trustees do not understand the same obligations ought to apply to them.

It is not enough that trustees possess an express power to act, the carrying out of that action must be for a proper purpose and for the benefit of Beneficiaries. This is key amongst the mandatory and default duties imposed upon Trustees by Deed and by law. Failing that, the act will be outside their powers, and amount to a breach of Trust.

Just where was the consideration and deliberation regarding the benefit to the Beneficiaries, the Consumers as defined in the Trust Deed, in this charade.

Attendees will have noted the emphasis by most Trustees on the Directors report, and the report from PwC. It ought to have been clear that these reports focussed on “what is best for unison”. The reports also canvassed various ownership options that are not available to the Trustees.

By the way, the Directors report overstates the accumulated dividend [page 6] by about $13M. Did the Directors not check their own report? Did the Trustees not check the figures?

The Trust Deed requires the Directors to report, but only in the sense that this is additional background for the Trustees to consider when making their deliberations on what is best for the Consumers/Beneficiaries.

Somehow recent Trust propaganda is trying to alter the real meaning of the “ownership review”. It has been referred to as a review of the ownership structure of Unison. That is wrong. Unison can review its ownership structure as much as it likes, but the Trust holds all 64 million shares on behalf of the Consumers/Beneficiaries. The review is intended to determine what the Trust does with respect to those shares. And the Trustees have an obligation, imposed by law, to act in this regard for the benefit of the Consumers/Beneficiaries. . . and for no other purpose.

The Trust propaganda, and the views of some others, is continuing to promote the “community” aspects, and the recently created “inter-generational” aspects. These views seem to ignore the definition of Consumers, clearly defined in the Trust Deed. The word “community” does not appear in the Trust Deed, and the Consumers are defined as the customers connected to the HB Unison network, “at any appropriate date”. That is now, and in the case of the current dividend payment, 30 September. It is not some customers connected at some time in the future.

The Trustees seem to need reminding that one of the original authors of the Trust Deed stated in his submission to the 2018 review . .

"There is a lamentable lack of understanding of the distinction between consumers and community. It is important that the Trustees emphasise and clarify that the sole beneficiaries of the Trust are consumers connected to the HB network of UNL, and that the terms of the Trust Deed clearly require the distribution of shares directly to the "consumers of the day" and for no other purpose. The Trustees of HBPCT have a fiduciary duty to uphold and comply with the specific provisions of the Trust Deed”.

Why were so many of the status quo submissions, and some Trustees, talking about selling Unison. That is something we at Free the Funds have never promoted or supported.

We will not let this matter rest.

In the meantime please take any opportunity to talk to friends and acquaintances about the Free the Funds mission. Consumers are perfectly capable of owning and managing their own shares in Unison. That would be the true meaning of “community”.