An INTERNAL appointment has been made for the position of Chief Executive Officer at Delta Utility Services Ltd.
Which likely means few external executives with relevant experience wanted to apply for lead position in the ‘degraded’ council-owned company —but then, not many executives were left internally. What does that say…….
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5.3.17 Seeking the New Grady #Delta
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Posted by Elizabeth Kerr
This post is offered in the public interest.
Filed under Aurora Energy, Business, Central Otago, Construction, CST, DCC, DCHL, DCTL, Delta, Democracy, Dunedin, DVL, DVML, Economics, Electricity, Finance, Geography, Health & Safety, Housing, Infrastructure, New Zealand, OAG, Ombudsman, People, Pet projects, Politics, Project management, Property, Public interest, Queenstown Lakes, Resource management, SFO, Stadiums, Travesty, What stadium
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What if? Dunedin... 
Inheriting the poison chalice!
If this is an internal appointment,
then surely it is inheriting the chosen palace!
An INTERNAL can keep the lid on wrongs and frauds committed.
A conscientious EXTERNAL might do the right thing and expose them.
So, it is left to appoint a manager from within. With the defections of late this to me sounds very like the ‘death rattle’ of a very sick company. If not in fact, then it will limp along trying to confuse the citizen/shareholders that all is well. The chances of successfully pulling that one off is about as hopeful as Graham Crombie fitting into his shirt and buttoning up the top button.
Can’t help but have a bit of fun around such a pitiful situation where DCHL appears to have passed up on the opportunity to get value for money out of Delta, and cut them loose to genuinely compete for the substantial asset replacement work that this massive capital expenditure for Aurora will entail.
It sounds as though it will all be handed to Delta on a plate. Just like the good old days. Cost plus plus. . . (Remember why the Ministry of Works died its bloated death in the 80s?)
Instead, we seem to be happy to appoint one of the few who has managed to survive within Delta under Grady Cameron, to continue the legacy.
A clone??
Made in his own image??
From the letters of his own name.
Grady Cameron.
Angry Comrade – ask his head office staff.
Agency Ramrod – what the Delta Board had hoped him to be.
Crony Damager – Richard Healey can say more about this title, and the top Delta people who have all left.
Delta will forever be a compelling reason of why Councils can be some of the worst entities to operate commercial businesses.
About time to start the inquiry into False Invoicing.
Something the board chair of Alpine Energy Ltd is dealing to, currently….
The board chair has been a director of Alpine Energy since 1999. He was appointed jointly by Mackenzie and Waimate District Councils.
[subtext: the two council areas breed rural/farming rugby-supporter types …. contacts/contacts/cross-fertilisation of oafs ….Delta/Alpine >> RUGGER tag]
There are ways to look at this, Nick: “one of the few who has managed to survive within Delta under Grady Cameron” – or one who couldn’t find another job anywhere.
False invoicing. Yes, it’s a one of the ‘standard’ fraud techniques. Perhaps the best way to set it up is to have a pair of limited companies that do a lot (but not all) of their business with one another. The process will be greatly facilitated if the two companies have a fully common management and board population. If this can be achieved the false invoicing can go on for a long time and on a large scale before it is discovered – usually as an outcome of one or the other of the two companies collapsing under the weight of said fraud. Such processes usually begin and end on a basis of uncontrollable greed.
How does false invoicing work in such a situation? Well let us say that we have company A and company B. Company B supplies goods and services to company A. Let us say that company B supplies a package of goods and services and then invoices Company A for $10,000. However, there are two invoices – one that goes to Company A for $10,000, and one that stays with the records of Company B for $6,000. This lower invoice may reflect the actual value of the goods and services delivered.
Company A then apparently pays Company B $10,000, but actually they don’t, this money goes into a third account, entitled, let’s say, ‘McB’, which issues a receipt to company A for the same $10,000 amount. This now makes company A’s book balance beautifully for the auditor – who may or may not be in on it.
A sum of $6,000 is then transferred from McB to a second fake entity ‘McA’. McA then pays B the $6,000 that matches the original $6,000 invoice in the records and makes B’s books balance and audit beautifully also. The difference between this and a real transaction is that $4,000 now sits in McB’s (Swiss?) account and is at the complete disposal of the perpetrators.
If the companies are large and do a lot of business with one another, this fraud can be ramped up to a very large operation indeed. Depending on their size of the companies and the time available ‘profits’ arriving in McB can rise into the tens or hundreds of millions of dollars.
Just as long as the two companies don’t do ALL of their business with one another. As long as this is the case, then it is impossible to weed the anomaly out of the legally required published accounts of the two companies because such accounts are not broken down into individual buyers and suppliers.
The only external evidence if this type of fraud is a chronic under performance of one or both companies as they are bled white. Any companies that seem to have large, stable and guaranteed incomes, but appear to be incapable of either returning a profit or maintaining their own infrastructure might reasonably be assessed as suspiciously anaemic in this regard – especially if they come in pairs.
The only internal evidence lies in the two sets of non-matching individual invoices and receipts for individual transactions between the two companies. While these documents are handled together by the perpetrators, who wear two hats – one for each company, they do not necessarily have to be in the same place or laid side by side for examination by third parties, and those who are perpetrating would surely make very sure that they never are.
As long as the perpetrators retain solid control of the two companies, and the actual owners of the assets and revenue streams are either inobservent, disenfranchised or both, then these two potentially enormous piles of paper will never meet, and all will be well for the perpetrators – unless they get too greedy, but of course they usually do.
Control of the two boards and a common senior management under the boards’ control is the key. If this is achieved the boards can shape the senior management in their own image easily and reliably enough. However, even one sharp and honest director could destroy the beautiful thing that has been created to the detriment of all (the perpetrators). This disastrous possibility must therefore be avoided at all costs.
Perhaps one way to achieve this outcome reliably might be for the perpetrators to set up a pre-selected pool of potential directors from which the two boards (A & B) may be selected by their existing board members. This pool could be initially selected for their apparent commonality of aptitudes, morals and interests with both with each other and with their potential colleagues.
Applicants having to spend a spell in the pre-directorial pool would allow existing directors to observe their potential partners in profit, and to assess them quietly over the longer term at barbeques, cricket matches, quiet drinks etc. This is not possible within the timescale of any direct directorial recruitment situation, or if ‘unreliable’ outsiders have any access to the selection and assessment process.
Any potential directors who might show unfortunate deviations from the incumbents’ expected moral standards and patterns of behaviour as an outcome of this assessment could then be quietly eliminated from the pre-directorial pool without any specific reason being given before they had a chance to do any serious damage.
Of course given its very low reported rate of corruption and white collar crime, it is surely unthinkable that any such situation would be allowed to arise, let alone persist within any major company operating in New Zealand, especially within the public sector. More Zimbabwe or Russia’s style don’t you think?
Best think Fletcher and Arrow International cases pending. We’ve already seen Auckland Transport. We could add in the name Beca. Or Opus.
Or Citifleet. Or CST. Or………
Sod’s Law
There’s a hex on Arrow just now in business circles – their attempting to pick up building projects nationwide is simply fraught.
Thus, if you caught their new ‘local television’ advertising campaign you would hear this – screened this week during Ch39 News – and be concerned:
[begins]
Arrow International knows what the essential ingredient is for accomplishing great projects: working with great people.
30 years on and 3000 projects later, with 10 offices and 400 staff nationwide, a company who values partnerships with their clients and carries a strong reputation for passion, integrity, and the love of a challenge.
Excelling in the construction industry and helping to create, with our partners, more iconic New Zealand buildings.
[ends]
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Truth is – widely understood in the construction industry – Arrow have had very few projects in the last two years. There is a reason for this.
Anyway, back to what Rob was saying.
Then Alpine Energy Ltd. And closer to home.
Round trip.
In the vehicle you bought off Brent, or friends at the Delta vehicle pool, just say.
Even a TV or three bought as a director of DVL and DVML.