Media reports last week indicated that Hautaki Ltd, the wholly owned subsidiary company of Te Huarahi Tika Trust (THTT), was seeking to sell some of its equity in 2Degrees to Iwi and other organisations. The motive appears to be the need to pay down the debt it incurred when it borrowed money to buy further shares in 2Degrees so it could maintain its 10% stake in the company.
This does not appear to make any sense. Furthermore, it is difficult to get a clear handle on why such a significant decision to sell is being made at this time or even why this decision was made at all. What we do know is that it is of grave importance to all Maori to pay attention to what Hautaki is proposing and why, because the decisions it makes today will impact Maori participation in the digital economy tomorrow.
Firstly there is an issue of transparency. Hautaki has without impunity operated as a very closed shop when it comes to public disclosure. For example its decision to sell shares was made despite the fact that the THTT has been largely non-operational for the last 18 months while new Trustees were sought. New appointees only came on-board in late 2012.
From what I can piece together from media reports and other conversations is that in a move to maintain its shareholding in 2Degrees at 10%, Trilogy International Partners (the parent company and main shareholder in 2Dregees) extended a $2.6 million loan to Hautaki in 2011 to allow it to buy new shares on offer. Largely failing to raise new sources of investment funds directly from Iwi organisations, Hautaki struggled to remain relevant as an investor in 2Degrees as Trilogy sought more money to meet its growth requirements. No doubt 2Degrees will require even more investment in 2013, with the prospect of having to purchase new spectrum (4G/700Mhz) and equipment to build out the next generation of mobile networks to remain a competitive player in the mobile space.
Add to this the rising cost of interest, expenses and lack of any significant income coming to Hautaki from its investment, you have a fairly compelling reason for the company looking to sell down shares. The selling of the shares may be good for Hautaki, but it is not good for Maori.
So why have we come to this?
Putting aside the fact that since the establishment of THTT, and the limited success of the Trust to meet any of its stated goals to advance Maori in the Information and Communication Technology (ICT) sector, the net result is that Hautaki has chosen to take the low road, and avoid criticism by ensuring unacceptable levels (based on now generally accepted tenants of good governance today) of disclosure on its operations.
It certainly came as no surprise to me talking to a newly appointed Trustee to THTT that they were completely unaware of the announcement of the sale of shares and he lamented the fact that the Trustees haven’t even met since their appointment last year. Of course the argument from the directors of Hautaki is that it operates independently of the Trust but surely such an important and strategic decision requires the support of the Trust. Especially since the Trust represents all Maori.
Why do I care?
Being part of the original claimant group who took the claim to the Waitangi Tribunal on radio spectrum in 1999 and being a person who opposed the unilateral deal imposed on Maori by the Crown at the time, it is not hard for me to to see and become seriously concerned that the poorly conceived and hastily implemented “compromise deal” would 14 years later not only fail to deliver little in the way of benefits let alone advance the participation of Maori in the ICT industry.
As the saying goes if you build your house on sand, be ready to live in a sandpit once the rains come.
So what needs to be done?
Well first up there needs to be recognition by all that this matter requires our most urgent attention. The development of and support for a Maori ICT strategy to improve Maori participation can not be left to add-hock initiatives any longer, but must be progressed as part of a concerted effort to improve the social, cultural and economic proposition of Maori.
The Government has seen fit to invest billions in policy and initiatives to lift New Zealand’s game when it comes to ICT infrastructure and education, while tolerating an ever increasing digital divide between Maori and non-Maori. Simply there must be money and minds capable of taking a long view and investing in closing the gap.
Further the Crown is due to make a decision on the allocation of digital dividend spectrum today. Maori have been clear. This is a Treaty issue and if the Crown fails to recognise Maori ownership through an allocation, not only does it risk further breaches of the Treaty but it will effectively undo much of the work done by Maori to be seen as a credible investment partner in the telecommunications sector.
Potaua Biasiny-Tule from Tangatawhenua.com said to me once that spectrum in the digital world is the equivalent of water in the real world. It is a useful and instructive analogy. We all know that without water things won’t grow. No plants, no food. So if we apply this to spectrum, no spectrum, no wireless, no mobile. We will create a digital desert.
There must be only one outcome from the Governments decision to day, and that is an allocation of spectrum, along with a commitment to develop an ICT strategy backed by a new group to implement it and manage all spectrum allocations both past and future. Anything short will continue to condemn Maori to uncertainty and fuel a digital divide into a much worse and deeper digital abyss.
Graeme Everton Claimant Representative Wai 776