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Assets sale could face legal hiccup

Published: 9:49AM Tuesday June 26, 2012 Source: ONE News

The Government's sale of state-owned energy companies could be held up by iwi demanding compensation.

After a fiery two-hour debate, MPs voted 61 to 60 in favour of partial asset sales legislation after a third and final reading in Parliament today.

The Mixed Ownership Model bill allows the sale of minority holdings in four state owned enterprises.

But Prime Minister John Key warned that the bill could still face legal action from Maori.

"There is no merit to any litigation and the issues of water, which sit at the heart of any potential litigation, have been well and truly covered off through lots of other stuff that we're doing," said Key.

"But I'm just simply saying that is always a risk."

The passing of the legislation mandates a 49% Government sell down of Mighty River Power, which will be offered up for sale before the end of September.

A minority shareholding in Meridian Energy, Genesis Energy, and coal-miner Solid Energy is also planned to be offered in the future.

One legal threat is from central Northland iwi Ngati Tuwharetoa. The iwi owns lake beds and rivers from which Mighty River power draws water to generate electricity.

Ngati Tuwharetoa said it wants compensation from the sale of the shares.

The Government confirmed it could hold back some Mighty River Power shares to give to the iwi as part of a future treaty settlement.

"It's possible that in that context as part of their treaty settlement, they may be interested in shares in energy companies because they live with the assets," Finance Minister Bill English said.

"We certainly don't rule that out."

Now that the legislation has passed, ONE News political editor Corin Dann said the Government will be looking at rolling out an advertising campaign to encourage Kiwis to buy shares.

Dann said the Government could not afford a "Facebook flop" whereby the share price falls lower after it has been listed.

"That type of thing would be disastrous for the  credibility of this asset sales programme. So they're going to have to be very careful to make sure that doesn't happen."

Legislation opposition

As the bill was being passed, protesters hit picket lines in Auckland and Wellington in a last-ditch attempt to convince politicians to stop the legislation being passed.

The small group in Wellington, joined by Labour MP Charles Chauvel, marched from Te Papa to Parliament.

"Thank you very much New Zealand for letting us have these beautiful assets. Now bugger off," Chauvel said.

Another group gathered outside Mercury Energy in Auckland, a retail arm of Mighty River Power.

Opposing views were also expressed in Parliament, with Labour leader David Shearer saying the fight goes beyond the walls of Parliament.

"The fight is not finished, it will be out of here and on to the street."

Opposition parties are still hoping for a citizen's initiated referendum, with 300,000 petition signatures needed to make that happen.

A referendum would not be legally binding.