Resignations at Christchurch City Holdings after call for review

By earthnews
6 months Ago

Resignations at Christchurch City Holdings after call for review

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Photo: RNZ / Nate McKinnon

The Christchurch City Council has called for a review of the makeup of its investment company board at the centre of a number of abrupt resignations.

A Canterbury business leader is urging the council to consider alternative ways of funding more than $3 billion in assets, after four independent directors of Christchurch City Holdings Limited (CCHL) quit the board, citing a breakdown in the relationship with the council.

CCHL board chair Abby Foote sent her letter of resignation to Mayor Phil Mauger on Wednesday, joined by fellow directors Chris Day, Martin Goldfinch and David Hunt.

Councillors discussed the appointment of a committee to be tasked with recommending a new CCHL chairperson to the council during the public-excluded part of a meeting on Wednesday.

A council report also recommended requesting the new chairperson provide advice on whether the CCHL board had an appropriate balance of skills, knowledge and experience given the council’s direction.

In December, the council rejected CCHL’s request to actively manage its portfolio, buying and selling assets as it saw fit.

CCHL manages assets on behalf of the council, including Lyttelton Port, Christchurch International Airport and power company Orion.

Business Canterbury chief executive Leeann Watson said the subsidiary companies contributed hugely to the regional economy and were critical in supporting the sustainable growth of Christchurch.

She supported CCHL’s proposal, saying the council needed to explore alternative funding models for the assets.

“Really the issue at hand is previously council have not been receptive to exploring alternative ways to fund that growth and keep the rates at an affordable level,” she said.

“Our infrastructure needs to grow with Canterbury and without the ability to either attract additional capital from the council or defer those dividends to reinvest, we’re struggling to see how some of those assets such as the Port, who do have plans to grow, can fund those plans.

“We really hope that whoever is the new chair of CCHL picks this up as a priority and we will certainly be keeping the pressure on them to do that.”

In her resignation letter to the mayor, Foote said despite the “best of intentions and considerable effort” the relationship between the CCHL board and the council – including current management – had broken down.

“We respect and support the right of council to make decisions around the city’s assets. This includes its decision not to accept the CCHL board’s recommendation in December 2023 to move to an active portfolio management model in order to invest in our region’s assets, pay down debt and grow dividends,” her letter said.

“However, the decisions council has subsequently taken over 2024 to maximise short-term dividends at the expense of paying down group debts and investing in the future of its companies has caused us to lose confidence in council’s ability to responsibly own core strategic infrastructure. We do not believe we can meet our duties as directors to CCHL or the subsidiary companies in our care with the current demands that council is making of CCHL.”

Mayor Phil Mauger did not address Foote’s claims in a statement issued on Thursday.

“I would like to thank chair Abby Foote and the departing directors for their contribution to CCHL. I wish them all well in their future endeavours,” his statement said.

“CCHL deputy chair Gill Cox will be the acting chair while the council moves to appoint a new chair.

“We look forward to continuing to work with the remaining members of the board and the new chair, who will move us forward in the direction set by the council.”