https://www.facebook.com/carol.sawyer.3511/posts/2559035257710118
WHY DID THE WEST COAST REGIONAL COUNCIL ACT AS BRIDGING FINANCE FOR THE 51% SHAREHOLDER OF THE ROLLESTON 1080 FACTORY? - Making a loss in the process it seems. What was wrong with using the bank?
The West Coast Regional Council made its initial investment in the Rolleston 1080 bait factory, Pest Control Research Ltd, in May, 2013, but did not disclose it until it was exposed by the Greymouth Star 17 months later.
See: https://www.nzherald.co.nz/nz/news/article.cfm…
This investment was made despite a 2010 - 2011 survey of homes in Ross, Hokitika, Hari Hari and Whataroa finding 92.5% were against their council being involved with 1080 in any manner. (Greymouth Star, 14 November, 2017)
By 2 September, 2016, the West Coast Regional Council had sunk $2,105,000 into the Rolleston factory! It was still only making prefeed baits and Pindone at this stage, and did not get consent to make 1080 baits until May, 2018.
See: https://www.nzherald.co.nz/nz/news/article.cfm…
The West Coast Regional Council has had a 49% share in the business since 2013 with, until 6 July, 2018, the 51% share being held by Malcolm Thomas, who had previously worked for the NZ government entity Landcare Research NZ Ltd.
See: https://www.stuff.co.nz/…/1080-factory-given-west-coast-reg…
(Pest Control Research Ltd at present has three directors - Michael Meehan, who is also CEO of the West Coast Regional Council, Matthew O'Brien, and John Wilson of Wanaka.) See: https://opencorporates.com/companies/nz/4460339
On 29 June, 2018, the West Coast Regional Council bought the 51% share in the factory from Malcolm Thomas, meaning they now owned the factory OUTRIGHT.
As you can see from the attached image from the 2018 annual report, the stated intention was to dispose of the newly acquired 51% share at year end ( i.e. a day later, on 30 June, 2018 ?!). However this did not happen and the WCRC sold it on 6 July, 2018, one week later, to Matthew O'Brien of Kiwicare Corporation Ltd.
Why did Council buy it from Malcolm Thomas to sell to Matthew O'Brien, instead of letting the two sort it out themselves? I was told by someone in Council that it was to help out with bridging finance. Surely it isn't the Regional Council's job to squander the ratepayers money to facilitate some private individual's business interests? PLUS… the annual report for the year ended 2018 states "Impairment on transfer held for sale - $272,549". I am not an accountant but it would appear that the ratepayers took a loss of $272,549 over that transaction, for holding the business in its entirety for a week.
Normally if a businessman required bridging finance they would go to the bank. Was this too risky, and if so why were the ratepayers obliged to take the risk and bear the loss?
As regional councils go, $272,549 would generally not be a large amount of money, but one must remember that the West Coast Regional Council has the smallest ratepayer base in the country, with a total West Coast population of 32,000, and only approximately 10,000 ratepayers.