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Spectrum trust airbrushes shrinking shareholding

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Spectrum trust airbrushes shrinking shareholding
By Waatea news editor Adam Gifford

The Maori spectrum trust Te Huarahi Tika has lost most of its stake in mobile phone company Two Degrees ... but it is trying to paint the setback as a victory for good governance.

Te Huaraki Tika was set up in 2000 by the then-Labour Government to take the heat out of Maori spectrum claims.

The trust, which included a mix of crown and Maori appointees chaired by former All Black Bill Osborne, was given $5 million and the right to buy a block of 3G mobile phone spectrum at a discount.

It took more than seven years and regulatory change before it could find partners to invest in a network.

Building the network came with a half billion dollar price tag.

So its shareholding would not be diluted by the new capital coming into the company, the trust’s commercial subsidiary Hautaki borrowed from major shareholder Trilogy International to buy new shares as they were issued.

But with no dividends or other revenue coming in, and no new Maori organisations willing to buy its shares, Hautaki couldn’t repay the loan.

That means it had to transfer shares to Trilogy for the loan and interest payments.

In March 2013 it owned a peak 20,151,966 shares or 5.07 percent of Two Degrees.

It also held 20,236,901 shares in trust for central North Island land incorporations Tuaropaki and Wairarapa Moana, who has taken up an earlier offer to invest in the company.

A transfer notice filed with the Companies Office last month showed Hautaki now has a total of 28728278 shares or just over 7 percent of the company.

Trustee Karaitiana Taiuru says only 8,491,377 of these belong to Hautaki, with Tuaropaki having 18,882,929 shares and Wairarapa Moana 1,353,972.

The way Hautaki chair Mavis Mullins described the deal in a press release, her organisation has retired all debt and retains a $15 million cornerstone shareholding on behalf of Maori, including the investments of Tuaropaki and Wairarapa Moana.

Meanwhile, Te Haurahi Tika trustee Anthony Royal, who was a director of both Hautaki and Two Degrees, has resigned.

Trustee Daphne Luke says he made a huge contribution, including helping Two Degrees develop its te reo smartphone, working with AUT University to create scholarships and cadetships for Maori within the company, and advocating Maori involvement in spectrum allocation policy.

While Te Huarahi Tika Trust has 3G spectrum it allows Two Degrees to lease on its behalf, it was unable to secure for Maori any of the 700MHz spectrum the company needs for when it builds a 4G data network.

Mr Royal is also the chair of Nga Pu Waea, the government-appointed National Maori Broadband Working Group, and a member of the expert panel advising Te Mangai Paho how to operate the new $30 million Maori ICT Development Fund.

Trustee Toa Greening, a south Auckland IT engineer, will replace him as an interim director on Hautaki.

Te Huarahi Tika Trust and its electoral college will now try to recruit new trustees.


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