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Other Crown-Owned Companies
Page updated 18 Jul 2012
Other Crown-owned companies - companies that are not state-owned enterprises or Crown Research Institutes - are generally established by the Crown to further certain policy objectives.
The objectives are entity-specific and can contain a mix of social, cultural, public policy and commercial statements. This entity form is used where the context or environment in which a function is to be undertaken is not fully commercial or the entity undertaking a function has mixed objectives. This section covers other Crown entity companies and companies listed on the Public Finance Act 1989 4th Schedule (Legislation website). For both types of company, Shareholding Ministers appoint board members and, under the Companies Act 1993 (Legislation website), may remove board members by shareholder resolution or by an alternative method of removal if this is allowed for by the company’s constitution.
Other Crown entity companies
Crown entity companies are registered as public companies and are bound by the provisions of the Companies Act 1993 (Legislation website). They are also are subject to relevant provisions of the Crown Entities Act 2004 (Legislation website). Crown entity companies are wholly owned by the Crown, i.e. shares may be held only by Ministers. Incremental transfer of ownership is not possible to parties other than Ministers of the Crown. i.e. Ministers cannot progressively reduce their shareholding to less than 100%. The board of directors of a Crown entity company is appointed by the Shareholding Ministers and is aaccountable to the Shareholding Ministers for the company’s performance. Crown entity companies are required to produce an annual Statement of Intent and an Annual Report, both of which must be presented to the House of Representatives by the relevant portfolio Minister. Crown entity companies monitored by the Crown Ownership Monitoring Unit (COMU) include the New Zealand Venture Investment Fund Ltd, Radio New Zealand, and Television New Zealand.
Companies listed on the 4th Schedule of the Public Finance Act 1989
Companies listed on the 4th Schedule of the Public Finance Act 1989 (Legislation website) are registered as public companies, and are bound by the provisions of the Companies Act 1993 (Legislation website). Through the Public Finance Act 1989, some accountability provisions of the Crown Entities Act usually apply. This form of entity is used where the Crown may wish to establish a company other than a state-owned enterprise, but it is not appropriate to establish the entity as a Crown entity company because:
- joint ownership is necessary or desirable as the Crown intends to reduce its shareholding at some stage to somewhere between over 50% and under 100%; or
- 'materiality' or 'distinctiveness' reasons indicate that a Crown entity company is not feasible or appropriate.
The board of directors of these companies is appointed by the Shareholding Ministers and is accountable to the Shareholding Ministers for its performance. Generally, companies listed on the 4th Schedule of the Public Finance Act 1989 have a lighter accountability regime compared to other Crown companies. Companies on the 4th Schedule are usually required to produce an Annual Report, which must be presented to the House of Representatives by the relevant Shareholding Minister. Some are required to produce a Statement of Service Performance. Some are required to produce a Statement of Intent.
Companies that COMU monitors that come within this category are Crown Fibre Holdings Ltd (with the Ministry of Economic Development), the Research and Education Advanced Network (with the Ministry of Science and Innovation) and Health Benefits Ltd (with the Ministry of Health).
The Shareholding Ministers' expectations for the boards of the non-SOE/CRI entities monitored by COMU were outlined in the Owner's Expectations 2008 Letters and the Entity Matrix. While the entities are not SOEs, many of the expectations in the Owner's Expectations Manual will still apply.
Other companies the Crown holds shares in
These entities are companies under the Companies Act 1993 (Legislation website), where the Crown does not fully own the company. The Crown has chosen to participate in these companies for various reasons, for example holding shares may have some element of national interest. Currently, the Crown holds shares in four council controlled trading organisations (see below for more information), one publicly listed company, one shipping line and one joint venture.
Council Controlled Trading Organisations
The Council Controlled Trading Organisations are set up by local government to undertake particular activities on their behalf. They are established by the Local Government Act 2002 (Legislation website), are registered as public companies and are bound by the provisions of the Companies Act 1993 (Legislation website). A council controlled trading organisation operates with the purpose of making a profit. The level of council ownership is 50% or more, held by either one or more councils.
|Christchurch International Airport Ltd||The Crown has a 25% shareholding. Christchurch City Holdings Limited owns the remaining 75%. Christchurch City Holdings Limited is a 100% owned subsidiary of the Christchurch City Council.|
|Dunedin International Airport Ltd||The Crown has a 50% shareholding. Dunedin City Holdings Ltd owns the remaining 50%. Dunedin City Holdings is a 100% owned subsidiary of the Dunedin City Council.|
|Hawke’s Bay Airport Ltd||The Crown has a 50% shareholding. Napier City Council owns 26% and Hastings District Council owns the remaining 24%.|
|Invercargill Airport Ltd||The Crown has a 45% shareholding. Invercargill City Holdings Ltd owns the remaining 55%. Invercargill City Holdings is a 100% owned subsidiary of the Invercargill City Council.|
For further information on Council controlled trading organisations refer to the Local Councils website.
The Crown also has shares in these companies.
|Air New Zealand Ltd||The Crown has a majority shareholding of just under 75 % in Air New Zealand, a publicly listed company. The Crown’s shareholding reduces each year as the Crown does not participate in Air New Zealand’s dividend reinvestment plan.|
|Pacific Forum Line Ltd||The Crown holds 23.2% of the shares in the Pacific Forum Line and 8.3% of the voting rights, which are divided equally between 12 of the South Pacific Forum countries.|
|Rugby NZ (2011) Ltd||This is a joint venture, limited liability company, based on a 50:50 partnership between the Crown and the New Zealand Rugby Union.|