Tainui seeks judicial review of Solid Energy land sales

Waikato-Tainui says it will seek a judicial review of the sale of surplus land by Solid Energy because the failed state-owned coal miner hasn't complied with legislation covering the government's Treaty of Waitangi settlements with the tribe, which give it first right of refusal.

Tribal spokesman Rahui Papa said talks with Solid Energy and the Crown broke down, which had prompted the decision to apply to the High Court in Christchurch for a judicial review.

"We are asking the court to invalidate the decisions made by Solid Energy relating to the sale process, direct that those properties be immediately removed from the open market, and require Solid Energy to adhere to proper RFR (right of first refusal) process by offering them to Waikato-Tainui at a price based on independent market valuation," Papa said in a statement.

The review relates to several specific properties on the outskirts of Huntly, with a total land area of 510 hectares which are being marketed by real estate firm Bayleys. According to the bayleys.co.nz website, the properties include a 200ha dairy platform, a further adjoining 67ha suitable for dairy support, and two other blocks of 136ha and 53ha currently used for cropping and grazing. The advertisement notes that 54ha, including a lifestyle property, have first right of refusal by Tainui.

Tenders for the properties close on March 23, which Tainui said meant resolving the dispute was a matter of urgency. The properties are among some 3,000ha of North Island land owned by Solid Energy.

"The RFR is a mechanism that was put in place to offer Waikato-Tainui the opportunity to have lands which were confiscated in 1863 returned to us," Papa said. "It was one of the key elements of our Deed of Settlement in 1995 and is, today, a key factor in returning tribal lands to our ownership."

Solid Energy chief executive Dan Clifford said he is confident the process the company is following is appropriate and legally correct.

"In relation to the sale of all our assets, Solid Energy has a responsibility to ensure openness, transparency and market-competitiveness, while also ensuring we meet any obligations such as, for instance, Waikato-Tainui's right of first refusal or the offer-back provisions of the Public Works Act," he said.

The company owed about $414 million to unsecured creditors as at September 17, while secured creditors were owed about $58 million and priority creditors $5.7 million, according to a KordaMentha report. Creditors agreed to return control of the company to its board and management for an orderly sale of assets after Solid Energy was placed in administration last August.

Solid Energy has taken almost $400 million of impairments over the past two years after an ambitious expansion plan was thwarted by slumping global coal prices. The Crown's equity is now effectively gone, with its banks at the front of the queue of creditors, having already agreed to restructure and forgo some of the debt.

(BusinessDesk)