Board shakeup at Mighty River as deputy chair quits

Mighty River Power deputy chairman Trevor Janes is to retire from the board in December, eight months after its partial privatisation and NZX listing.

The news comes as Mighty River cops criticism for launching a share buyback programme a week before the initial public offer closes for shares in fellow electricity company Meridian Energy.

Shares [NZX:MRP], which listed at $2.50 in May, closed down 1.79% to $2.19.

Mighty River signalled Mr Janes’ pending departure in an oblique reference in a recent stock exchange notice, notifying shareholders of their annual meeting in Auckland on November 7.

As part of a resolution to approve directors’ fees, Mighty River highlights a need to appoint two new directors.

“Following retirements from the Board in the 2013 financial year the Board has considered the optimal mix of skills and experience required for the Board going forward.

“As a result of this review the Board is considering the appointment of two directors in the near term (being one additional director and one director to replace Trevor Janes on his retirement in December 2013).”

Mr Janes joined the Mighty River Power board in June 2005. He is seen as a leading governance figure and a favoured government appointee.

Capital + Merchant connection
Mighty River’s offer documents disclosed Mr Janes’ previous stint as a former director of finance company Capital + Merchant, for 18 months until October 2006.

He resigned as a director more than a year before the company collapsed in November 2007 owing $167 million to 7500 investors.

In June this year he announced his retirement as chairman of Public Trust, amid legal squabbles over it being nominated as a replacement trustee of failed finance companies.

This week Mighty River announced plans to buy back up to $50 million of its own shares - less than five months after listing.

Chairwoman Joan Withers says the board believes the buyback is a prudent use of capital and is in the company's best interests.

However, opposition parties have slammed the move, describing it as an act of desperation designed to prop up an ailing share price, during the partial sale of Meridian.

That suggests government influence in Mighty River’s decision to embark on the buyback programme – something prime minister John Key denies.

Mighty River shares [MRP:NZX] have been trading well below their issue price of $2.50 in recent months. Yesterday they closed up 1.4% to $2.23.

Mr Janes has a relevant interest in 124,600 Mighty River shares.

dbridgeman@nbr.co.nz