Half of CCHL board resign over rift with Christchurch City
Half the board members from a company controlling more than $5 billion of assets on behalf of the Christchurch city council have abruptly resigned, citing a breakdown in the relationship with the council over its request to frontload dividends.
Christchurch City Holdings (CCHL) announced the exodus on Wednesday night, the same day councillors met in secret to discuss governance-related issues, according to agenda documents.
CCHL has a majority stake in, or outright owns, a number of key city assets, including Lyttelton Port Company, Christchurch International Airport and lines company Orion.
CCHL chairwoman Abby Foote and board members Martin Goldfinch, David Hunt and Chris Day were departing with immediate effect, the statement said. The relationship between CCHL and the council had broken down, it added, citing a request by the council to frontload dividends as a key stressor.
In a letter to Christchurch mayor Phil Mauger, Foote laid out the history of a council-commissioned strategic review into CCHL. The council had a right to make decisions about the best use of city assets, she said.
“However, the decisions council has subsequently taken over 2024 to maximise short-term dividends at the expense of paying down group debts and investing in the future of its companies has caused us to lose confidence in council’s ability to responsibly own core strategic infrastructure,” Foote told the mayor.
“We do not believe we can meet our duties as directors to CCHL or the subsidiary companies in our care with the current demands that council is making of CCHL. We also cannot support the processes that have characterised the way this council increasingly operates as a business owner.”
In recent weeks, a group of councillors have agitated against the CCHL board, which was refreshed with a number of highly regarded professional directors after a scandal that engulfed the company over its former chief executive, Tim Boyd.
The council spent more than $2 million on a strategic review of CCHL and related advice and signed off on each stage of investigations. However, some councillors took umbrage at the final recommendation from CCHL: That the company become a more active investment manager — an approach it said would have returned greater levels of dividends to the council, helping to offset rates rises.
Opponents campaigned hard against the prospect of selling down strategic assets. CCHL sought to defuse the characterisation by saying it intended to keep all the existing capital in the group, but pursue a more diversified portfolio in pursuit of higher, more consistent returns.