Sue Wells – The New Canterbury Tales

June 1, 2011

Does the Government own shares in Fletchers? #eqnz #chch

There’s an email doing the rounds about the government, Fletchers, the Grand Chancellor demolition. It basically alleges corruption. Today CERA sent out a response – I’ve asked if they are happy with me reproducing it here and they are. I’ve printed their response in full, below. The very short version is (my words now) – the email doing the rounds is a load of rubbish.

If you have any queries about it, sing out and I will send you the contact at CERA who has the ability to comment on their behalf.





“You may in recent days have received a malicious email which makes a number of baseless assertions about the relationship between the government, the Canterbury Earthquake Recovery Authority (CERA), and Fletcher Building.

One of the assertions is that the government is the largest shareholder in Fletcher Building, and therefore stands to benefit from any recovery work it undertakes.  This is incorrect.

This anonymous email’s author has discovered the Reserve Bank’s custodial service and drawn the conclusion that the Reserve Bank, and hence the government, owns the shares held in it.  In reality this is a nominee company through which local and international institutions hold shares in a range of companies, one of which is Fletcher Building.  It is an absolutely standard structure, common worldwide, and which has been in place for over 20 years.

This link to the Reserve Bank website sets the NZClear system out in very simple terms.


In brief, NZClear is a real-time settlement system which members access from their premises.  Each member has a security account on the system which records the securities “lodged with New Zealand Central Securities Depository Limited” (NZCSD), a custodian, fully owned by the RBNZ.  NZCSD becomes the legal owner of the securities on the relevant register and holds securities on behalf of the member, the beneficial owner.  The inventory of securities held in the depository currently stands at around NZD92 billion.


So it’s very clear, the government is not “the beneficial owner” of Fletcher Building shares or any other shares held under the NZClear system.

A number of other assertions have been made in the form of a Q&A about the aforementioned relationships.  The answers provided are also incorrect.

Fletcher Building has won just the one demolition contract, for the Hotel Grand Chancellor, and hasn’t been involved with any other demolition work in the central city.  There is a vast amount of demolition work being done in and around Christchurch, almost all without Fletcher’s involvement.

Some correct answers to questions in the email which has been circulating are below:
Q.  Who appointed RCP (Resource Coordination Partnership Ltd) as Project
Managers for the management of ‘critical buildings’ following the February
22nd earthquake?
Christchurch City Council appointed RCP to help project manage the demolition process.

Q .  Who appointed Fletcher Building to manage the demolition works and
then, reconstruction works?

Fletchers have not been appointed to any such role.

Q .  Who called for the tenders for the demolition of the Grand Chancellor?

Originally the owner, then Civil Defence was working through the tender process.  Since its establishment, CERA has been coordinating the tender process.

Q .   Who was/is to be the Principle to the demolition Contract (i.e. the

CERA is the principle.  However, all costs associated with the Grand Chancellor demolition will be recovered from the owner.

Q .    Who assessed the Tenders for the Demolition of the Grand Chancellor?

Initially Civil Defence appointed engineers in association with the owner’s engineers.

It then went to CERA appointed engineers in association with the owner’s engineers.

A recommendation was then made to CERA and the owner before a final decision was made.

Q .    Who has been awarded the Grand Chancellor job (at whatever price and/
or conditions)?

Fletcher Construction Company.  The contract is worth in excess of $10 million – this was stated openly by the owner of the Hotel Grand Chancellor when the contract was awarded.
Q .  Who has been blind-sided?

The tender process was, and is, an open tender process.  It was done with all due care and with impartiality.  The preferred contractor was awarded the contract based on the best deconstruction solution for the Grand Chancellor.  The ultimate decision was the owner’s.




  1. Lady in pink this is hard. Firstly i have no shares in any involved. Perhaps what we have is the superfund or ACC or who ever investing at arms length. none am i am I involved with. Provided Fletchers have won the contracts without shit no problem. If any involvement or crap bury them

    Comment by Dave — June 1, 2011 @ 8:36 pm | Reply

  2. The “Principle” should be “Principal”. That apart, I’m inclined to go along with Dave’s last sentence. I guess one is bound to apply the the principLE of “innocent until proven guilty”. Be that as it may, wherever there is disaster, it is pretty well axiomatic that there will be those who will look for ways of turning the situation to predatory advantage, and it’s a fair bet that astute minds will already have got to work devising scams whereby to extract big bucks out of the post-EQ situation in Christchurch. It’s the same mentality that drives looters – only the scale is different.

    Comment by Peter Tuffley — June 2, 2011 @ 1:44 am | Reply

    • It lend a lot of doubt to a post if thee person can’t spell

      Comment by sue — June 18, 2011 @ 9:48 am | Reply

  3. Well done Sue, so many emails are doing the rounds that are urban myths. This is obviously one of them.

    Comment by Marc — June 2, 2011 @ 9:52 pm | Reply

  4. This is no Myth boys and girls …. where there is smoke, there is fire. And I can assure you that there is a LOT of corruption going on.

    The Federal Secuiry Beurea (former KGB) has been intercepting GCSB emails, which contain references to kick-backs and other non-democratic processes going on.

    NZ politicians have no morals.

    Comment by Mikhail — June 5, 2011 @ 11:00 pm | Reply

  5. In forwarding the original email I tagged this with the rider of doubt as to its authenticity. That suspicion has been vilified. Good job Sue…

    Comment by D.A.Becker — June 7, 2011 @ 6:03 pm | Reply

  6. well done on the balanced response, it would be interesting to see if the person that is perpetuating this rumor has the spine to come out and make these allegations publicly? If not, why not….because they are baseless and there could be some sour grapes?

    Comment by J — June 8, 2011 @ 9:01 pm | Reply

  7. Well, of course Cera are going to respond in this way, especially if it is true that they are staffed by Fletcher building personnel (I’m not saying that’s true, but it’s another rumor). The only way to get to the truth is through independent research and scrutiny.

    Comment by pcd — June 18, 2011 @ 8:32 am | Reply

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