A deal to build a new $9.4 million purpose-built building at Waikato Innovation Park has been soured by claims of poor governance and oversight by city officials.

City councillors were called to an urgent meeting on Tuesday to approve funding of a new 3487 square metre building at the park.


The building will be occupied solely by Tetra Pak.


Waikato Innovation Park Ltd, a city council-controlled organisation, are financing the build through a $9.43m loan with the Bank of New Zealand.


In April, the council's CCO subcommittee approved the funding arrangement but subsequent inquiries by staff and legal advice revealed the deal could only be signed off by the full council.


Garry Mallett, chair of the council's CCO subcommittee, said once information was received that the loan was a major transaction that needed council approval, an urgent meeting was called.


The bank loan was considered a major transaction under the terms of Waikato Innovation Park Ltd's shareholders agreement with the city council.


The city council is a 100 per cent shareholder of the company.


"That's why we've had the urgency, that's why some of the paper work is a little bit informal, but that's the start and end of it," Mallett told the meeting.


The building of the Tetra Pak building had been flagged to council in Waikato Innovation Park Ltd's past two statement of intents.


In reply, councillor Martin Gallagher said Tuesday's meeting resembled a "five minutes to midnight" rubber stamping exercise and struggled to understand why the deal had not been put in front of elected members sooner.


Gallagher was "offended" that as an elected member he had no vote in Waikato Innovation Park Ltd's statement of intent or the appointment of its directors.


"I think personally that's very bad governance," he said.


"Frankly on this we have egg all over our face in terms of good governance and good management. This is not how a major corporation would act. A major corporation would not have a one-minute to midnight rubber stamp deal."


Hamilton mayor Julie Hardaker was pleased Innovation Park continued to develop and grow and said Tetra Pak was an "outstanding international business".


However Hardaker was "very very annoyed" by the recent turn of events and said it was the responsibility of council-controlled companies to know the terms of their shareholding agreements.


"I think this has been entirely unsatisfactory and sadly that detracts from an excellent investment in Innovation Park," she said.


Councillor Dave Macpherson said it was the responsibility of the company and council staff to know the details of the shareholder agreement.


Such issues had happened in  the recent past in areas where council had interfaced with the commercial world, Macpherson said.


AARON LEAMAN - Stuff

x

Contact Us


Please enter name
Please enter your email
Please enter a subject
Please enter a message
x

External link


This data is stored on the WDC site, click here or wait 5secs. the page will open in a new tab so you can return to this site at any time

We are now redirecting you to an external site, we have no control over and are not responsible for