Hard News by Russell Brown

Gone by lunchtime

David Parker's resignation as Attorney General was appropriate - but his subsequent departure from all Cabinet posts would seem to relate more to a desire for comprehensive damage control than a response to the actual offence in question.

The government's chief law officer must be seen to be beyond reproach, and Parker clearly is not. Anyone who owns a small company will know that the answer to the question "Did the shareholders pass unanimous resolution not to appoint an auditor for the current year?" is a box we tick every year in our return to the Companies Office.

The answer is virtually always "yes"; although the idea that every small business owner in the country convenes his or her shareholders and formally resolves not to employ an auditor is a bit fanciful. And, where there is no separation of ownership and management, as is the case in most small companies, it's not that big a deal.

You tick the box, which is what Parker and his father did. But Parker and his father were, not, of course, the only shareholders in Queens Park Mews. Their estranged business partner Russell Hyslop held a third of the shares and ought to have been formally consulted before the ticking of the box.

Hyslop, who came across on the TV news as quite excitable, says that had he been convened and asked for his approval, he would not have given it. Of course, if he had genuine concerns as to the management of the company, he could have exercised various rights under the Companies Act, including the right to inspect records, but he didn't. That doesn't make the Parkers' declarations any more correct.

What the Parkers should have done is exercised their right to compulsorily acquire Hyslop's shareholding when he was declared bankrupt in the mid-1990s, and removed him from the shareholders' register altogether.

As Stephen Franks points out in the Herald this morning, thousands of business owners "probably make false annual returns like [Parker] is alleged to have done," but " we lawyers know that we can not do that. A lawyer who signs false statements or even blank documents knows that no excuse is acceptable."

Politicians can't do it either. They, too (although they quite often aren't) should be beyond reproach. Franks reaches this conclusion:

There is an interesting potential consequence.

I think most lawyers will be unequivocal about Parker having to stand down as Attorney-General, no matter how much he was admired. They might have less concern about him retaining his other portfolios.

But eventually, if he is tried and convicted for making a false statement under section 377 of the Companies Act, he must not thereafter "directly or indirectly be concerned in or take part in the management of a company" unless the court says otherwise.

That might cramp his style as Minister of Energy and shareholder of the state generators.

Ouch. Good point.

But I hope that all National and Act members, especially those who aspire to be Cabinet ministers one day, have their own papers in perfect order. And as they bay for blood they might do well to remember National's term in government, when John Banks managed to operate as a walking, talking conflict of interest and was declared "an excellent minister" by his Prime Minister. There was not a lot of accountability going on then.

And as he proclaims from the moral high ground, Rodney Hide might do well to remember his own links, and those of his Act colleague Owen Jennings with dubious financial schemes - which did members of the public a lot more injury than Parker ever did.

Meanwhile a couple of readers have directed my attention to the transcript of the other "apology" that wasn't actually delivered by Prime Minister John Howard, which remains a magnificent piece of writing.

And Andrew Gladstone of Turners Auctions had a response to last week's comment about the company's failure to purchase Trade Me for a mere $1 million:

I have spoken to one of the staff who was involved in the negotiations and he informs me that this all took place in early 2000, so 6 years ago. As I understand, Trade me were concerned about Ebay's launch into NZ and wanted to offload. Turners was not the only company approached with the $1m price tag.

I suppose what I'm saying is that although in hindsight it looks like Turners were foolish not to buy Trade me for $1m when you look at what Fairfax are paying six years down the track, but it needs to be balanced up with Sam Morgan's willingness to sell at $1m (and I think even he would admit that he was asking a cheeky price at the time) and the fact that it had only been up and running for about a year, not to mention that Ebay could've bought them but instead decided to try and compete. Hindsight is a wonderful thing.

For the record, Turners launched an online auction website for the trade in 2000 called Autoturn. It still runs successfully to this day (I run it) so it's not like the company completely under-estimated the growth in online sales. The million dollar story is always a good one when told in its simplest form but I just thought I needed to put some perspective on it.

And now for something completely different: puppets perform Motorhead's 'Ace of Spades'. Yowsa! Although I don't think Lemmy would be at all impressed with his likeness …