apr-11.pdf (2.07 MB) - Crown Ownership Monitoring Unit

Continuous disclosure, after a slow start, is growingSOE continuous disclosure was instigated in January 2010 for the eight largest SOEs –Genesis, Meridian, Mighty River Power, Solid Energy, Transpower, NZ Post, KiwiRail andKordia. The SOE continuous disclosure board is maintained on the COMU website.Initially, there was room for improvement in the disclosure regime’s performance interms of volume and quality. SOE disclosures fell short of the NZX benchmark. It wasonly with the flurry of results announcements for 2010/11 (see 2010/11 Q1 in Figure 19)that disclosure levels moved to a reasonable level. Figure 19 also shows a pattern ofsubsequent growth in announcements through to 2011/12 Q1.Fi gure 19 – SOE continuous disclosure announcements, volume by quarter■ Genesis ■ Kordia ■ Landcorp ■ Meridian ■ Mighty River Power ■ NZ Post ■ KiwiRail ■ Solid Energy■ TranspowerSource: COMUOn the surface, the volume of disclosure would still seem below to that of the NZX. Forexample, in the final quarter of 2010/11, Contact and TrustPower had 34 and 25 NZXannouncements respectively, whereas the three comparable generator/retailers had14 in total. However, when excluding announcements irrelevant for an SOE such asshare allotments, director disclosures and share buybacks, Contact and TrustPower’sannouncement counts were just seven and five respectively. Volume is not an issue.In terms of addressing the OECD objective of being as transparent as publicly tradedcompanies, the focus needs to be on the quality of information disclosed.When compared to similar NZX announcements, SOE announcements on COMU’swebsite appear to be constrained by the guidelines set to ensure that resultsannouncements meet a minimum standard. This observation is supported by the factthat some SOEs (Meridian, Mighty River Power, Genesis and Solid Energy) also makeannouncements on the NZX board. At times the same news is supported by more indepthinformation on the NZX board, and at other times certain announcements aremade only on the NZX board. With some rationalisation between the two disclosureregimes, the quality of SOE disclosure should approach that of listed companies.Presentation of results has improved, but gaps remainA key area of development in SOE disclosure levels has been in the public presentationof annual and quarterly results.page | 42