DCC on DCHL, subsidiaries and DCTL

UPDATED POST 18.10.12

“It’s probably good to take all your bad news at the same time and look forward to the future.” -Denham Shale, DCHL

PROPERTY SPECULATION BY DELTA DIRECTORS WITH LOCAL COMPANY LINKS, IS THE MISUSE OF PUBLIC FUNDS. STOP.
GLARING CONFLICTS OF INTEREST ARE INVOLVED. STOP.
DCHL CHAIRMAN IS FULLY COMPLICIT, ALONG WITH DCHL BOARD OF DIRECTORS. STOP.
DUNEDIN CITY COUNCILLORS FAIL RATEPAYERS AND RESIDENTS SEVERALLY. STOP.

See link to ODT report added below.

DCHL Annual Report 2012 (PDF, 2.1 MB)
Dunedin City Holdings Ltd Annual Report 2012

Warren Larsen Report (PDF, 3.9 MB)
Governance review of all companies in which Dunedin City Council and/or Dunedin City Holdings Limited has an equity interest of 50% or more.

BUT WHAT’S THE REAL STORY?

Dunedin city Council
Media Release

Dunedin City Holdings Limited Annual Result for the year ended 30 June 2012

This item was published on 17 Oct 2012.

This past year has been a challenging year in which there has been a well publicised change in governance of the parent company. It has been a year that has been affected by a slow economy and poor export log prices and a year in which the subsidiary companies decided to write down the values of assets where impairment occurred.

Revenue has increased for the year by 3.7% to $254.9m, however, the profit has been affected by a series of factors that are fully explained in the Annual Report of the company. These factors are the effect of the Dunedin City Holdings (DCHL) group providing subvention payments directly to Dunedin Venues Limited in lieu of dividends to the Council, the effect of asset impairment provisions made by the Delta group in respect of goodwill on a number of past business acquisitions and land at Luggate and Jacks Point, pressure on margins in a slow economy, and lower carbon credit income in comparison with last year.

Separately from the activities of the subsidiaries the holding company board has been active working on a number of issues arising from the Larsen report. “Last December I stated that we have been charged with restructuring a number of aspects within the group. You have seen the recent appointment of two additional directors to the parent company board. We anticipate further announcements by year end from suggestions to be made to the Council over the next two months.” comments DCHL Chairman, Denham Shale.

“As a matter of principle, the current board has taken the view that borrowing should not be entered into for the payment of dividends. But it is important to note that much of the drop in profit last year was caused by the agreement in respect of Dunedin Venues Limited and accounting provisions rather than cash outflows. Against this, dividends in this current year will be paid from surpluses that we would expect to make over the year to June 2013. Therefore it is not necessarily correct to assume that because last year was poor that there will be no dividend this year. ”

Aurora Energy Limited has traded well although the economy has slowed the growth in the quantity of electricity carried on the network.

The NZ forestry industry has had another difficult year and, as the public is aware, City Forests Limited decided to cease operating its timber processing mill. The Milburn asset has been leased to Craigpine Timber Limited.

The electrical asset planning and maintenance businesses of Delta Utility Services Limited have operated well. But the demand for other infrastructure services weakened and company was forced to conduct a series of adjustments to reposition the company to match reduced demand. The land holdings of the Delta group, which have attracted media attention, are under close management.

The summer tourism season last year was well underpinned by the visits of cruise ships. We expect an improving cruise ship season over this next summer.

Overall passenger numbers into Dunedin International Airport were 9.9% up for the year. The operating surplus after tax achieved by the company for the year was an improvement on both budget and the same period last year. A substantial revaluation of the assets of the company has increased the carrying value of the investment in the books of the DCHL parent company.

Contact Denham Shale, Chairman, DCHL on 021 375 112.

DCC Link

### ODT Online Thu, 18 Oct 2012
$5m loss for DCC group
By Chris Morris
A $9 million write-down in Delta’s investments – including property at Jacks Point and Luggate – is partly to blame for a multimillion-dollar loss booked by the Dunedin City Council’s group of companies.[…]Mr Shale was reluctant to criticise yesterday when asked if the property purchases had proven to be a mistake. “I wouldn’t call it a mistake, no. As we see it today, it could be called an unfortunate decision, but that is very much in hindsight. It’s very easy in hindsight.” He also saw no need for the new DCHL board to investigate the rationale behind the purchases, saying they were “a fact that’s there”. “We can’t do anything to change it.” He blamed the result on the world economy…
Read more

Related Posts:
12.10.12 DCHL, subsidiaries and DCTL
30.8.12 Dunedin City Council seen by Fairfax Business Bureau deputy editor Tim Hunter

Posted by Elizabeth Kerr

25 Comments

Filed under Business, DCC, DCHL, DVL, DVML, Economics, Media, Name, People, Politics, Project management, Property, Site, Sport, Stadiums

25 responses to “DCC on DCHL, subsidiaries and DCTL

  1. Elizabeth

    ### ch9.co.nz October 17, 2012 – 5:39pm
    Poor economy and asset write-downs behind loss
    A profit last year of $19 million has shrunk this year to a loss of more than $5 million for Dunedin City Council-owned companies. But the man in charge of the council’s holding company says a poor economy and asset write-downs are behind the result. The city will still get its dividend, but Denham Shale made it clear there will be changes to how that money is paid.
    Video [to be uploaded]
    http://www.ch9.co.nz/content/poor-economy-and-asset-write-downs-behind-loss

  2. Anonymous

    Exactly. What story? What dodgy dealings? Just write it all off and pretend it never happened. It seems the council’s well-used broom has been picked up by Denham Shale to push this whole messy business under that same rug as the stadium costs.

    ‘Aurora Energy Limited has traded well although the economy has slowed the growth in the quantity of electricity carried on the network.’

    Either there’s a middle manager feeding the Chairman a bunch of crap or the Spooks had a hand in that. If the “economy” had a conscience it would be feeling really down about stuff with so many public sector institutions blaming it, instead of their self-serving interests and reckless spending.

    Power prices have only gone up and I doubt very much power usage has gone down in any substantial way. All in all, somebody’s pulling a real fast one there saying a power company isn’t making money in today’s climate. Ask a Central Otago power customer how they feel about having Aurora as their lines company.

    Calling the inappropriate spending and sub-sequent write-downs by Delta Utility Services as “adjustments” demonstrates how disinterested this new Chairman is with accountability. He clearly does not concern himself with multi-million losses in the public sector but I bet you he would go ape shit if it happened in his private business.

    His message is clear: Let them get away with monetary murder so they can do it again.

    DELTA
    THINK.CORRUPTION

  3. Russell Garbutt

    A damp bus ticket interview by Ch9. Pathetic. $9m of write down of “assets” by Delta and its shonky OB deals to the utter benefit of Coburn, Boult and cronies. And who paid? We did, Denham.

  4. Peter

    All goes to show nothing has changed. An old trick. You get rid of the old, promise the new, and the same old people, more or less, continue to muddle along ineptly (which is the kindest thing you could say). They are obviously going to try and let those responsible for these disastrous land purchases to slip through the door.
    The ODT continues to hold on to more damaging material handed on to them, but won’t publish.

  5. Anonymous

    ‘Mr Shale was reluctant to criticise yesterday when asked if the property purchases had proven to be a mistake. “I wouldn’t call it a mistake, no. As we see it today, it could be called an unfortunate decision, but that is very much in hindsight.”

    ‘He also saw no need for the new DCHL board to investigate the rationale behind the purchases, saying they were “a fact that’s there”.’

    […insert more dismissals of accountability…]

    Only in a public company can a $9M write-down on inappropriate spending be called an “unfortunate decision” – it’s not their money after all. There are some very bad boys getting away with the jewels and now we have a new chairman mopping up the mess.

    Ratepayers should be looking at this cover-up and wondering how far the Tartan Mafia has infiltrated their city.

    DELTA
    KEEP.THINKING.CORRUPTION

    http://www.odt.co.nz/news/dunedin/230836/5m-loss-dcc-group

  6. Peter

    The trouble with not naming and shaming those who have made bad decisions, and letting them slip through the door, is that, without the media publicity, these people more easily go on to do more damage elsewhere. This seems to be the new style of management where you offload those who have become too hot and then smooth things over by not apportioning blame… with the weak excuse that, “oh well, the damage has been done, let’s ‘move on'”. Dave Cull’s mayoralty style exemplifies this. The trouble with this is that it leaves decent people feeling that justice has not been done as the culprits have got away with their misdeeds.

  7. amanda

    “..a fact that’s there..” Ridiculous. Anything to keep safe incompetent managers.

  8. Hype O'Thermia

    Peter – “The trouble with not naming and shaming those who have made bad decisions, and letting them slip through the door” – remind you of anything? Catholic Church, perhaps? They’re paying bigtime now – too late for the people they damaged though – for their see+speak+address no evil policy towards paedophile priests. Will there ever be a process to similarly make the individuals & organisations that have done long-term harm here?

    • Elizabeth

      The point is not one of blaming and shaming, it is one of clear conflicts of interest (proven by the documentation obtained so far), corporate corruption, and white collar crime – see fraudulent use of public funds. It isn’t time for re-writing history by these sods, it’s for seeing them to Court.
      With more than one or two complaints to the Press Council on the side.
      The public aren’t interested until a group of people get it into print via Court news because that’s the bubble most members of the public prefer to live in… the place where other people (crooks, shysters, suits, like Mr Denham, Mr Baylis, Mr McLauchlan, Mr Boult, Mr Coburn, and friends – the unethical, the shameless) decide the public’s fate. While Mr Cull, the ineffectual mayor of Dunedin, flaps uselessly in some messy nest he build himself, far up a tree.

  9. amanda

    Good point Elizabeth. Syd’s stadium cabal aren’t going to hold Denham and co. to account, they are part of the con too, and Greater Dunedin certainly won’t unless they think the voting public demands it (they certainly don’t want to lose their precious seats around council) and Cull? Looking the other way. The local media? Not in this town. Denham has told us he is not at all concerned that they lost millions of rate funds, not at all, so he will obviously allow it to happen again and just blame it all on the economic climate, the blanket excuse for incompetence, or worse. So the only way for accountability and to stop future mistakes of ‘hindsight’ is to follow legal processes. Sue the incompetent muppets.

  10. amanda

    Completely off topic. I noticed in the DScene that Aaraon Hawkins is now another ‘let’s make the stadium work’ devotee. Somehow he thinks if they all just work smarter somehow he can make the stadium work. This needs to be noted if he decides to try to be elected to council next year. He is making clear his plan is to continue to try and prop farry’s folly up just as ineffectual Cull is trying to do.

  11. Peter

    Let’s say, I used public funds to feather my nest. Would any readers here or elsewhere be prepared to let ‘bygones be bygones’ and for us all to move on?

  12. Anonymous

    Who is calling for public asset sales?

    This is why Denham Shale has been put into this role. It was a long term strategic plan to bring the city’s finances to its knees to make asset sales the final solution. Denham’s role is to confirm it’s all gone to shit so he can complete the plan to sell the assets.

    On the side line are ultra-greedy individuals waiting to grab those assets at going prices. Don’t look to the Otago Daily Times for help – you can add the Little Media Moguls to the list of parties who are complicit through their lack of action.

    These people are psychopaths and all they want for is a few more million in their pocket and care nothing of how they get it. They will destroy what is left of Dunedin’s future and think nothing of it tomorrow.

    Do not fall for the “call”.

    It’s a big dirty lie being pushed on a naive population.

  13. amanda

    Do you think the ODT will inform who on council is hunky dory with asset sales? Will they remind voters of the councillors who are responsible for the city’s massive unsustainable debt? Make a connection between the two?

    • Elizabeth

      amanda, since ODT are standing back from fully investigating these most serious of maneuvres at DCC/DCHL/Delta (current and historic, but don’t forget DCTL…) the Fairfax Business Bureau know that the field’s wide open for them to clean up in print and online media. Fairfax should need no prompting to call SFO early, none of us should, who hold fears, suspicions, and documentation.

  14. Lots of abridging going on in the ODT today.
    They don’t want readers to know:
    The Jacks Point sections required urgent sale because Hanover failed to finance settlement.
    The vendor was effectively bailed out by the DCC.
    And any suggestion that there was links between Delta directors and the vendor

  15. Elizabeth

    ### ODT Online Wed, 7 Nov 2012
    Delta development private treaty sale deadline nears
    By Mark Price
    The size of the loss Dunedin City Council-owned Delta Investments Ltd has made over its investment in its residential development at Luggate could be confirmed later this month. Delta’s Luggate Park joint venture with property developer Jim Boult is on the market as a deadline private treaty sale closing at 4pm on November 14. Included in the sale notice are seven residential lots and two”future development sites” amounting to 51ha consented for 160 residential lots.
    Read more
    http://www.odt.co.nz/news/queenstown-lakes/233631/delta-development-private-treaty-sale-deadline-nears

  16. Anonymous

    That was another well hidden article in the paper. Slopped onto the regional section with a heading as exciting as cleaning the paper’s ink off your fingers. I’m sure just another coincidence from Allied Press, nothing to do with limiting damage for the stinkers who were engaged in “property speculation” at Delta and its “investments” arm.

  17. Calvin Oaten

    Also note it is said a joint venture with property developer Jim Boult. No mention of Mike Coburn who was also involved. Some even say it was him who encouraged Delta to invest in the first place. But that couldn’t be of course, because as a director of Delta that would outside the rules of engagement.

  18. Anonymous

    Coburn owned Ruboc Holdings which was a principal investment vehicle for Singaporean money for the original Jacks Point development. viz http://notice.singtao.com/ADMA/00251/epdf/E_SeaHolding(fp)x.pdf

    • Elizabeth

      Ah yes, Mr Darby. There’s a lovely friendship group that exists around all of this, despite the honourable wording in the PDF document. Last time I visited Jacks Point I got a look through Mr Darby’s new house (the idea being it might become a private hotel), and Mr Chris James (likely financed by Darby and friends) had a similarly large house under construction for himself. The properties were said to be each worth about $3.5 million. It was lovely to talk to a couple of the construction crew.

  19. Russell Garbutt

    Ruboc being Coburn backwards…..really original.

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