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Friday, May 24

‘Mum and dad’ investors myth busted


Green Party research, confirmed by Treasury, shows that half of the shares in Mighty River Power that National sold to retail investors went to just 13,000 people and that 10 percent of the retail shares went to just 400 wealthy people and organisations, Green Party Co-leader Dr Russel Norman said today.

The sale of Mighty River Power saw 113,000 retail investors, referred to as ‘mum and dad’ investors by the National Government, buy 26.9 percent of the company. Analysis by the Greens and Treasury shows that half of those shares were, in fact, purchased by fewer than 13,000 people who bought an average of nearly $35,000 worth of shares. 

That included a select group of fewer than 400 individuals, trusts, and organisations who bought 10 percent of the retail shares with an average investment of nearly quarter of a million dollars each. The remaining 101,000 retail investors bought only 13.4 percent of the company – less than the amount taken by overseas institutions.

“National’s myth that it sold Mighty River Power to ordinary New Zealanders has been well and truly busted. John Key’s ‘mums and dad investors’ line was a con,” said Dr Norman.

“The truth is that 98 percent of New Zealanders bought no shares at all. Half the retail shares went to just 0.3 percent of the population, and a tiny group of just 400 wealthy individuals and organisations got 10 percent of the retail shares.

“National’s asset sales have been a failure in its own terms. The hundreds of thousands of eager buyers that Mr Key promised didn’t show up, so he sold the shares to a small number of wealthy people instead. The shares are not widely held; they are overwhelmingly concentrated in the hands of a few.

“National is governing in the interests of the handful of wealthy people who bought large hunks of Mighty River Power, not the vast bulk of Kiwis who don’t want to pay again for what they already own.

“Far more New Zealanders have signed the petition for a referendum on asset sales than bought into Mighty River Power. National should cancel the remaining the asset 
sales,” said Dr Norman.