"Further alarm" was created for Queenstown Chamber of Commerce board members on Monday after Queenstown Airport Corporation chairman Mark Taylor addressed a meeting, chamber chairman Alastair Porter said last night.
Mr Taylor attended the board's meeting on Monday afternoon to explain QAC's recent sale of a 24.99% shareholding in Queenstown Airport to Auckland International Airport Ltd (AIAL) for $27.7 million, following a memorandum to the chamber's members on Friday commenting on the deal.
However, Mr Porter said the board did not accept "any" of Mr Taylor's explanations for the lack of consultation, or his reasons why AIAL was issued shares.
"In fact, some of Mr Taylor's explanations were cause for further alarm."
Mr Porter said Mr Taylor made "an admission" he expected QAC could have achieved a higher price from another party, which "seemed to contradict a further assertion" the QAC was required, as a Council Controlled Trading Organisation, to act commercially at all times.
When asked by board members, Mr Taylor confirmed QAC got only one property valuation, one company going concern valuation and no independent peer reviews were commissioned.
"From a [chamber] board perspective, this was extraordinary for such a high value transaction, especially when there had been no consultation or opportunity for competitive offers," Mr Porter said.
The chamber was also concerned to hear QAC would "not have discussed the transaction" if Queenstown Lakes District Council councillors, representing the shareholders, were in attendance at any meeting.
"While Mr Taylor confirmed [AIAL] had said they would withdraw from the transaction if QAC consulted on the transaction, he told the [chamber] board he regarded this as a bluff by AIAL," Mr Porter said.
In his opinion, the admission "totally undermined" QAC's reasons for failing to consult the council and subsequent claims in the media the chamber had "misrepresented" AIAL's position were "totally incorrect".
A claim consultation with other parties would have led to "insider trading in [AIAL] shares" was dismissed as being "illogical, given open and transparent information consultation would have removed any possibility of insider trading", Mr Porter said.
The chamber board considered QAC's statement of intent "totally misleading", given forecasts anticipated capital expenditure of $16.685 million, "yet Mr Taylor told the board the QAC's forecast capital requirements were mid $50 million and this was the need for the transaction with AIAL".
The chamber also dismissed Mr Taylor's suggestion urgency was required to complete the transaction because there was "no guarantee the future was going to be as good a time to sell the shares as now".
Further, Mr Taylor told the chamber he considered the most important reason for the alliance were the benefits for QAC as a result, yet in a recent joint bid by AIAL and QAC "for a new airline to come to New Zealand, they lost the bid to Christchurch", Mr Porter said.
Mr Taylor said last night the statement of intent needed to be filed before March 1.
He said the forecast had changed rapidly in five months on a basis of international servicing growing at 44% per annum.
The QAC would be in a better position to invest capital expenditure as expressed in the statement of intent.
