It could be possible to ring-fence shares in partially floated state-owned assets, but it was not necessary to do so to protect the ownership, Craigs Investment Partners broker Peter McIntyre said.
Concern has been expressed by opponents to the Government's proposal to partially sell Meridian Energy, Genesis Power, Mighty River Power and Solid Energy.
The Government has asked Treasury for its advice on the partial sell-down, and also advice on reducing the state's stake in Air New Zealand.
Mr McIntyre said there had been "outrage" at the proposal, with opponents pointing to earlier sales of state assets.
"They need to be reminded this is a partial sell-down and there have been a few changes since then. The securities law and the Takeovers Code have been improved to protect investors."
The Government could make sure shares were only sold to those with New Zealand addresses, but that could include overseas residents with a house in New Zealand for other reasons, such as their children being educated here, Mr McIntyre said.
The Government could also make a ruling on who was to receive the shares. ut after the first sale to New Zealanders, they would then be free to sell to whoever they wanted.
Two classes of shares could be introduced - A and B classes, with A for New Zealand residents only and B for overseas investors. ut that could affect the price of the shares.
If the Government made a law forcing the shares to be sold only to New Zealanders at each transaction, perhaps the Government buying them back and onselling again, the price could be held artificially low, Mr McIntyre said.
"There is enough protection around to make sure a takeover can't happen and that investors are protected. Even if the Government only has 50.1%, it still has complete control."
Labour Party leader Phil Goff released figures which he said showed National's sale of Contact Energy in 1999 was a bad deal for taxpayers but a great deal for foreign companies.
"Foreign-owned Edison made a lot of money out of the sale of Contact. It sold its 51% stake in Contact for nearly $1.7 billion in 2004 when the whole company was sold for $2.3 billion in 1999.
"That's windfall money New Zealanders missed out on and foreign companies walked away with. There's only one winner out of privatisation and it's not the taxpayer."
Since it was sold offshore, Contact had paid dividends of $1.5 billion to its private shareholders. That was more money that had gone offshore and had not been delivered back to the country, Mr Goff said.
National made a "big deal" of selling Contact to mum and dad investors in 1999, just as Prime Minister John Key claimed last week those same mysterious investors would buy the power companies and Air New Zealand.
But Mr Goff claimed this was a fallacy then and now, and released figures that showed:The number of shareholders in Contact fell 34,845 in just six months after the sale.
• The number of shareholders had fallen from 225,000 at sale to just 80,911 last year.
• The majority shareholder is Australian-owned Origin Energy with 51%.
• Just under 75% of shares were held by 20 companies.
However, as the Otago Daily Times previously reported, when Contact was sold, demand was so high applications had to be scaled back to 806 shares per application.
That would have made it uneconomic for some shareholders to keep the shares and demand would have continued, pushing the price up and encouraging small holders to sell.
Mr McIntyre said Mr Goff was confused in the fact that Contact was a full sale and the Government was only proposing a partial sale of the four energy companies.
"The viewpoint is that it's an opportunity for KiwiSaver to invest in local companies and that it gives great opportunities for New Zealand investors.
"Looking at Air New Zealand, it was bailed out because it was about to go bankrupt. The Government took its stake to 74%, but I can't see why that is such a magical number."
In Australia, the banking sector had been partially privatised and investors had done particularly well, Mr McIntyre said.
"I can't see what the raging debate is about."
