Chris Lee & Partners Ltd

Taking Stock 26 March 2026

Chris Lee Writes:

THE late Brian Gaynor, founder of Milford Asset Management, had many objectives when he set up Milford more than 30 years ago.

Gaynor, who arrived from Ireland in the 1970s, had worked as a researcher for Jardens and had strong views on the changing expectations of fund managers. He had watched the dreadful lack of ambition and poor culture at the likes of AMP, National Mutual, and the National Provident Fund, where investors' returns were not prioritised.

At Jardens, Gaynor was not a gun researcher, analyst or stockpicker. He was good but not top gun.

But Brian Gaynor had some special qualities. Firstly, he was much nearer to socialism than Trumpism. 

Secondly, he could see that investors needed better returns and better communication than the self-focused institutional fund managers were offering. 

Thirdly, he could see the value to equity investors of buying shares in the fund manager.

He was keen to list on the NZX his Milford company, enabling investors to share his vision.

Wow, would he be impressed today with the value Milford has created. It now manages nearer $30 billion than $20 billion, with annual revenue of probably $500 million. If listed, it would probably have a market capitalisation of many billions.

The listing never happened. A certain Bob Jones was the obstacle to listing. 

Gaynor had seen through Jones when he was an analyst and researcher.

He recorded his views in newspaper articles he contributed, an endeavour at which he excelled, combining real knowledge, a willingness to tackle awkward subjects, a good use of research and an ability to write well.

Between Jarden’s employment and his full-time commitment to Milford, Gaynor had worked in Parliament as an advisor to David Lange.

As noted above, Brian Gaynor was more attracted to the left than the right, and he had developed a loathing of Robert Muldoon, the accountant who led the National Party for a decade.

Gaynor had watched Labour grossly overspend its election funds, leaving a nasty overdraft of more than $2 million to address. Jones arrived and negotiated his knighthood and some of the wording of his citation (services to women) in return for $2 million.

To Jones' horror, and Gaynor's discomfort, Gaynor was standing beside Lange when the cheque was handed to Lange.

That led to two of Gaynor’s strongest convictions. Muldoon and Jones were the worst New Zealanders he had met, he said, and the $2 million cash for knighthood was the most blatant corruption he had observed.

After Gaynor witnessed this he wrote some fairly powerful newspaper columns, analysing Jones. Jones sued him and the NZ Herald. The paper solved the debate, probably by agreeing to run Jones’ columns for some period. Promising kind treatment to solve defamation was then a common tactic, welcomed by Jones.

Jones used the platform to deride Gaynor and undermine his credibility as a future public company founder. 

To my great regret, Gaynor kept Milford off the bourse. Any original shareholder would have had outstanding returns. There is no need to recall the returns for those who stuck with Jones.

These memories would now be drowned by the huge success of Milford, a business model Gaynor scripted, and one that has been achieved with almost none of the sort of controversy surrounding the likes of Money Managers or Fisher Funds.

While Milford has been flourishing, the whole world has watched investors move tens of trillions of investor money into index funds, actively managed funds, pension funds, private equity funds, and, more recently, private credit funds.

The number of people who resist the fees and the exclusion from decision-making is relatively small.

Many undistinguished people in financial markets creep into fund manager roles and, with bonuses, become extremely rich. The owners of those funds also become extremely powerful. They seek to use the power of their investors' money to underwrite (for handsome fees), to block votes at annual meetings on governance, and even to vote on business strategies.

I have yet to understand why people with no obvious or wide business experience can be assumed to have the power to dictate policies or strategies.

My preference is that they simply sell out when they dislike strategies, policies or people.

But my views are not relevant.

Today the likes of Milford with, say, a 3% holding in a company like Mainfreight, will have a platform for their views that often sway corporate outcomes.

Index funds, which by definition simply replicate the composition of an index, almost never employ wise, experienced business people. Their machinery simply apes an index, as set out in the mandates when the fund is formed.

So you can get remarkable anomalies.

Last week we saw such an anomaly. Several institutions in recent months had bought shares in Santana Minerals, having calculated potentially high returns, while calculating incremental reductions in risk.

Earlier this month, Santana was advised its company had been admitted to the ASX 300. Many funds, and especially index funds, have to copy the ASX 300.

The average turnover of Santana shares over the past two years has been around a million shares per day, with the highest turnover being around five million. Last Friday, March 20, was the day when the many funds were forced to buy Santana shares, many of those being funds that simply copy the index.

On Friday, 24 million shares were bought, and a further 10 million were being sought when the market closed.

It does not require much imagination to see how the new buyers were being gamed. Every market participant would have known that Santana was likely to enter the ASX 300.

I would bet a good pair of my favourite pyjamas that had Brian Gaynor not died some few years ago, tragically from a brain tumour, he would have stocked up on shares to sell to the index funds a long time ago.

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OVER the last two years, Taking Stock has chipped away at the danger of investing in private credit funds.

My logic was that much of the lending was to borrowers whose requests for funds were rejected by banks. Much of the lending was on second-tier securities. The lender had no meaningful capital buffer, so losses quickly fell on the investor.

The extraordinary indebtedness of American corporates seemed a sign of heightened risk.

The private credit funds are not subject to the same level (as banks) of scrutiny. Transparency is low. Bad debt provisioning is erratic.

To me, private credit, like opening a second bottle of tawny port after a big meal, was most unwise.

We now read that both Goldman Sachs and JP Morgan Chase are offering their clients an opportunity to buy instruments that produce very high returns if private credit loans default. 

In other words you can bet on private credit failure. 

It is nicely ironic that Goldman Sachs and JP Morgan Chase both sell off loans to private credit managers.

Ah, the great American dream. You can bet on anything.

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NEW Zealanders may have their own "dreams". Perhaps they fantasise that a New Zealand company will offer to buy back Kraft Heinz Watties.

The Hastings-based food processor Watties has been an icon. Established in the 1930s by Jim Wattie, the business was certainly the key to Hawke's Bay wealth, along with the two major freezing works, when I lived in Hastings in the 1960s.

Hawke’s Bay was rich, with no unemployment, the wealth based on wool, lamb, beef and horticultural prices. Watties would contract pip and stone fruit growers, processing the vast majority of production. It employed thousands of people, directly and indirectly. 

Times changed.

More than 30 years ago the great Irish winger, Tony O'Reilly, then the CEO of Heinz, bought Watties. Later Warren Buffett's Kraft company bought Heinz. The global company might have seen Watties as a bit more than a rounding error, in terms of its profit contribution.

Global giants have rarely been great long-term owners of companies in New Zealand, many of them (Vestys, Borthwicks as examples) finding it easier to quit NZ than close better-located subsidiaries, National Bank of NZ being another example.

More than a year ago Kraft Heinz Watties told Hawke's Bay stone fruit growers there would be no more long-term contracts. Night follows day.

How much longer before Kraft Heinz Watties looks for a buyer? Would a New Zealand buyer emerge?

Note that in recent times Kraft Heinz Watties has been obtaining the bulk of its tomatoes from Asia and shipping them here. Spain and Greece dump superb tinned peaches and apricots here at extremely competitive prices.

Is it a dream that a new version of Jim Wattie will emerge, to avoid all the issues that seem certain to follow a Kraft Heinz Watties closure?

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Mercury Energy 

Mercury Energy has set its interest rate for its 7-year Senior Green bond at 5.17%, with payment due no later than 31 March 2026.

Clients interested in this bond are welcome to contact us as we have a small supply remaining.

Travel

13 April – Taupo – Johnny Lee

14 April – Hamilton – Johnny Lee

15 April – Tauranga – Johnny Lee

16 April – Lower Hutt – David Colman

17 April – Napier – Johnny Lee

Chris Lee

Chris Lee & Partners Ltd

Taking Stock 19 March 2026

AT THE risk of boring investors who might have no reason to care about the Santana Minerals proposed gold mining project, I record that the consenting application is now taking on a much wider degree of importance than just a resource consent hearing for a gold mine.

Because of its size, its extraordinary discovery, and the high level of cross-party political support, the consent application may well become a proxy for the next election and may provide a boost for race relations.

Do we as a country support the extraction sector to create jobs, higher income and regional development, or do we want the status quo funded by a redistribution of wealth? That remains a question that may point to the election result.

Last week in an unusually-balanced Sunday paper article, the journalist who wrote the article hypothesised that the debate was between the rich wine-drinking snobs (who oppose the mine) and blue-collar workers who want the jobs, the higher wages and regional development.

The characterisation of this being snobs fighting workers was based on one set of social media warriors being opposed by a growing and already much bigger number of those who want the project to begin.

Clearly this is the sort of clickbait nonsense that would be relevant if the consenting process was really a popularity contest.

It is not such a contest.

The outcome, as was disclosed by the Fast Track panel last week, will be determined by evidence-based science and maths, not by emotional opinions of film stars, painters or university activists.

I suggest this explains why a video featuring beautiful bush, singing birds, picnicking kiwis and wekas and fluttering takahes would be seen as of no relevance, an indulgence for fanzone followers.

Nor would the claim that prostitutes would overwhelm the settlements surrounding the mine be of any interest other than to fanzone people.

The panel wants to know that the mining would be done safely, with total respect for waterways, the air, flora, fauna and surrounding hills. It wants to know what the financial benefit should be.

If the science illustrating safe mining processes was evidence based and sound, and the margin between extraction and sales would lead to worthwhile financial success, the consenting process would be straightforward.

I have to add, that one more question would have to be answered.

That is, would the process be consistent with the act that was written to support the settlement of Ngāi Tahu claims in 1998, when Sir Tipene O'Regan, helped by Jarden investment bankers, negotiated a billion-dollar plus solution to a long-running dispute? Within that law was a reference to communication, binding parties to communicate properly when interacting with iwi.

Communicating properly has come to mean communicating respectfully, listening and responding to concerns, and ensuring that in such processes with iwi there would be every effort made to achieve a solution supporting a benign partnership outcome.

If iwi alleged that the communication was not up to this standard, potentially this could lead to a claim that the Treaty had been breached.

Perhaps in some versions of the original Treaty of Waitangi there were words that had similar expectations of any negotiations.

Fairly clearly, the last four years have brought changes in how New Zealand is responding to issues of the environment (climate change) and of iwi rights. The reason for this was political, at least initially.

Ardern’s undisclosed agenda to lock in the Māori vote was uncovered during the co-governance Three Waters issue and the Public Interest Journalism Fund.  That led to heat and division.

It is likely it led to the small town butcher shop ugly incident, unreported, that preceded by days the “empty tank” plan to exit politics.

The strategy has been logical but the communication and debate before attempting to execute the strategy was not that of an experienced, skilled leader.

Yet, in my opinion, Ardern succeeded in initiating discussion which has led to desirable change in the quest for better partnerships with iwi.

New Zealand has measurably developed better understanding of iwi culture, knowledge and better appreciation of the obvious high-value skills of the likes of Ngai Tahu, Tainui etc.  By any standards these groups are an attractive commercial partner, as well as upholders of their people’s culture.

Particularly, this new mindset is now relevant to negotiating power when a project seeks resource consent.

My reading of the apparent failure of the financially attractive Trans-Tasman Resources (TTR) request to mine off the Taranaki southern coast, has its origin in a failure to embrace Māori and to be respectful of their opinions.

Much of the media reporting of the preparatory work a decade ago implied old-fashioned, crass Australian responses to iwi concerns about the sea-bed mining proposal.

In the last decade, the media has highlighted any boorish TTR reactions and trumpeted the opposition case. 

Media and slowly the public have sided with the Māori opponents, as have the courts. 

A highly valuable project seems unlikely to proceed. Social licence matters.

The Santana consenting application will have most certainly learned from the errors of TTR, noticing the media emphasis on the Australian disregard for respectful behaviour.

In my view the most likely obstacle that could trip up the Santana application would be a failure to communicate in the manner defined by a modern interpretation of Treaty law, endorsed increasingly by a widening number of the public and by the courts.

That the Treaty is now in focus is not just my opinion.

The Fast Track Convener, Jane Borthwick, an Environmental Court Judge, expressed concern when the allegation was made by the head of a relevant rūnanga that the communication might have breached the Treaty guidelines.

At the pre-hearing discussion, created to help Borthwick set the timing and pick appropriate panellists, a request was made for two Ngāi Tahu representatives to be on the panel, alleging potential Treaty breaches.

Borthwick expressed real concern about any allegation of a Treaty breach.

I inferred that no panel she selected would want to take on the task of the Waitangi Tribunal.

She selected a highly-skilled KC, Matthew Muir, to chair the panel and choose a range of panellists, each of whom has relevant skills. None were from Ngāi Tahu.

Very clearly, it was left to Santana Minerals to ensure its communications with all relevant iwi groups was respectful, responsive and properly documented.

Just as clearly, an outcome that was supported by Maoridom and respectful to its concerns and culture would eliminate the need for the panel to resolve the sort of issues that might best be considered by the Waitangi Tribunal or the High Court.

I salute the Māori leaders and Santana’s Chief Executive Damian Spring, who seem to embrace the new paradigm, and clearly want to avoid an impasse.

The planned project would be of great value to iwi, who have sought hundreds of well-paid jobs at Santana’s work site, and to Ngai Tahu and rūnanga which target growth and economic improvement in the South Island.

It seems obvious that Santana’s experienced Chairman, Peter Cook, an Australian, would stand alongside his CEO in the quest of good communication and a sensible agreement.

If the result is a benign outcome, finding solutions that embrace concerns, my guess is that the Fast Track panel would be mightily relieved.

Indeed, I expect that ticking that box with sincerity and goodwill might be the key to the panel’s decision. A consent would then have provided a template for all applications that involve iwi considerations.

Already, we have some sort of a template from the Waikaka Gold project consent, granted a few weeks ago, after the iwi communications were effective and led to harmony.

Although this consent was awarded by the Environmental Court, not Fast Track, its process is a useful guide.

The applicant, Waikaka Gold, wanted to move a waterway, more like a creek than a stream, during its alluvial mining project, restoring the creek in stages and remediating the land after mining concludes.

Iwis' concern is often based on the view that if you extract something from the sea or the land, you can compensate by making community grants that recognise the value of the extraction.

In Waikaka’s case, the recognition and the grant led to scholarships awarded and career pathways opened by the gold miner.

Ultimately, all parties were brought together.

The key man at Waikaka was New Zealand’s outstanding mining leader, Warren Batt, now 80. He was, with Kim Bunting, the key to the Santana discovery. Batt has a long history of solving problems. He worked closely with the rūnanga.

It seems fair to assume that his wise approach will have been observed and may form a part of the template all applications for consent would find helpful.

Perhaps the final line is that evidence-based science, arithmetic accuracy based on credible assumptions, and courteous communication will be the most valued aspects to put to the Fast Track panel.

The panel has displayed some wisdom itself. No party that has any value to offer to the process would want the Fast Track panel’s decision to be appealed, perhaps by an appeal to a court for a judicial review.

The Fast Track panel’s decision should be the final word. Heaven knows it will have cost enough - more than $10 million - to form a judgment.

The panel hearing Santana’s application has now sought to eliminate a pathway to an appeal that might have arisen from any group that could claim its views, however absurd, had not been heard.

Accordingly, the panel’s chair, Muir, has invited a number of apparently small and hardly relevant groups to submit their thoughts to the panel. The panel will listen politely. 

One imagines not too much time will be granted to those who manufacture faux claims.

One group, a Facebook grouping of 7,400 people who favour the project, would want to submit evidence-based opinions, while another Facebook would need to do better than claim that the mine is "ugly".

The Santana application, being of such immense scale (billions of dollars of revenue for the Crown over 10 years, hundreds of well-paid jobs, billions of exports) that if its application processes cover all bases, it would have done NZ a great favour.

The template would be invaluable.

Those New Zealanders who have invested hundreds of millions in the project would be well rewarded, providing the gold price settles at a satisfactory level.

Amongst them will be more than 20,000 people who have invested via the Sharesies platform that allows beginners to get their first taste of investing.

A successful project would lift their wealth, perhaps by a multiple of three times.

The outcome rides on the skillset of Santana in meeting the expectations of relevant parties, in a harmonious way.

_ _ _ _ _ _ _ _ _ _

THOSE Sharesies new investors may be enjoying their gold mining risk money, but many should also be contemplating their error in investing in Air New Zealand. Were they wise to invest without knowledge?

A year or three ago, when Air New Zealand shares well exceeded $1, institutions and carefully advised investors were selling, largely to a huge number of Sharesies clients.

Admittedly, those Sharesies clients received a morale boost after the price fell to 60c.

At that time the Air NZ CEO, Greg Foran, disclosed to the public that he had bought some millions of shares in the company he managed, at around 61 cents.

The small shareholders might have felt they were in good company in placing their faith in the airline. 

At the time, Air New Zealand was the share most favoured by Sharesies’ clients.

It may have been the share least favoured by those with access to useful analysis, bar Foran, who may have been trying to inspire investors.

Today the share price is just above 40 cents as the business model continues to be tested by social demands and commercial realities.

Many airlines with much bigger markets than Air NZ have been bailed out by governments, including Air Malta. Of course, Air New Zealand has been bailed out at different times.

One imagines that there is some value for new investors in learning the hard way, providing the sum gambled was small.

_ _ _ _ _ _ _ _ _ _

Mercury Energy Bond OfferMercury NZ Limited is considering an offer of up to $250 million of 7-year senior fixed rate bonds. Further details of the offer are expected to be released next week.

Mercury is one of New Zealand’s largest renewable electricity generators and retailers and is 51% owned by the New Zealand Government. The company currently holds an investment grade credit rating of BBB+ from S&P Global Ratings.

The interest rate for the bonds has not yet been announced, however given current market conditions, we are expecting it to offer around 5.00%. This will be confirmed when the offer documents are released. Mercury is unlikely to cover the brokerage costs for the offer. This will be confirmed next week.

If you would like to register your interest, pending further information, please contact us promptly with the amount you wish to invest and the CSN you intend to use.

Please note that indications of interest do not constitute any obligation or commitment to invest.

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Travel

13 April – Taupo – Johnny Lee

14 April – Hamilton – Johnny Lee

15 April – Tauranga – Johnny Lee

16 April – Lower Hutt – David Colman

17 April – Napier – Johnny Lee

Chris LeeChris Lee & Partners Limited

Taking Stock 12 March 2026

Chris Lee writes:

QUITE naturally every fund manager and most investors are now contemplating a new world in which oil transport is interrupted, leading to sharp price increases.

Inflation is closely linked to oil prices.

Interest rates are closely linked to inflation.

It is a statement of fact that the worlds largest economies are grossly overindebted, meaning interest rate rises would be at least inconvenient, if not crippling.

My own guess is the oil dilemma is short term, as will be Trump and Netanyahus war, likely to end when they read their advisers research on Irans history and discover Iran will never surrender, and will never have its leadership subservient to the West.

To me, it has seemed obvious for some years, as our newsletter has regularly opined, that the hard to solve real world problem stems from cynical use of debt for decades.

Within that real problem, the biggest certainty is that just as happened prior to 2008, all manner of lenders have surfaced chasing high margins, beefing up the problem.

Their target has been the ambitious borrowers not serviced by the trading banks. They build their edifices at low tide levels.

Real banks are intensely regulated and supervised, required to hold meaningful capital, forced to be transparent about nonperforming loans, and audited these days by audit firms that would be severely damaged should their audits be superficial.

My caution about lending catastrophes does not exclude banks from my concern, but the obvious issue is the much looser, less regulated, much less transparent portfolios of loans being held by literally hundreds of Private Credit fund managers. The largest of these include Apollo, BlackRock, Blue Owl, Capital, Goldman Sachs, Blackstone and, largest of all, Ares Management.

Consider this:

 Blue Owl has recently cancelled the withdrawal rights it had promised its investors (largely pension funds and investment banks).

BlackRock has written off a $25 million loan to zero, three months after attesting that it was not a doubtful debt.

The major UK based fund MFS has written off a $2 billion loan, partly funded by Santander and Barclays Bank, after discovering the security for the loan had been double pledged by the fraudulent borrower. The Australian fund manager Realm Investment House was a lender.

BlackRock has limited withdrawals on one of its largest ($26 billion) fund after redemptions spiked.

 Blue Owl, a listed company, has seen its shares fall by 30%, Blackstone by 26% and Apollo also down 26%.

 Private credit managers, having sabotaged their relationship with pension funds by breaching their liquidity promises (honouring redemption requests) have turned to the trusting but gullible retail market.

Pension funds have lobbied for governments to allow MORE exposure to Private Equity and Private Credit.

Trump, the fount of all wisdom, has introduced legislation to enable fund managers to use private investor (401) superannuation accounts to patch up Private Credit illiquidity.

Goldman Sachs is marketing a product to short private credit loans. (to bet the loans fail)

A reasonable conclusion is that loans to borrowers that the banks would not fund are vulnerable and that the quantum of them is now sufficiently sizeable that a flow of failures would seriously impact market confidence, globally. The loans are not liquid, nor transparent.

There are US $2 trillion of private credit loans.

The rationale for them is from the same playbook that in New Zealand led to the mushrooming of nonbank lenders in the years between 2001 to 2008.

Whereas banks, particularly the BNZ, had lent like greedy amateurs before the 1987 market collapse, in the years prior to 2008 the most stupid lending was done by finance companies and mortgage trusts, though the banks were certainly unwise. 

When the tide went out on the finance companies and mortgage trusts we found a huddle of mostly men, many of whom had lied, cheated and wilfully deceived, an example of which will be described in the next item.

I still wonder how the Canterbury Mortgage Trust could promise first mortgages only on existing properties, and be seen, by the waning tide, to have lent to serial bankrupts on development loans.

I also gasp at the fees this fund generated for the lawyers whose lending made up the portfolio. Competence? Commerciality?

Those days were then. Today it is private credit globally, that exhibits the same vulnerability we saw in 2001 to 2008.

Iran and Ukraine, as well as other hotspots, are top of our concerns. Geopolitical events whose outcome is unpredictable are a worry, but there are underlying conditions that cannot be solved by a truce. The misuse of debt and poor lending is a long term problem.

Horrendous overuse of debt, and selfish margin chasing by underregulated greedy and inexperienced lenders, is a threat that is identifiable, mathematically.

We need to recall the NZ experience in nonbank lending at a time when the investment mindset was gungho. Loan defaults may be a longterm hazard that we currently overlook.

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IT WAS with the niggling concern about bad lending in my mind that I drove last week from Timaru via the Mackenzie Country for a mine visit at Bendigo, near Cromwell.

As I approached Omarama, in the region of the hydro schemes the roadside cafe The Wrinkly Ram appeared.

Investors with a good memory will recall how this venue was where the kindling was set for the most unnecessary bonfire of a billion dollars (at least) of taxpayer money, more than decade ago.

The year of the Wrinkly Ram misbehaviour was 2009. The bonfire was set just days after an adult, detailed plan to preserve that money had been presented by genuinely experienced and skilled credible people to a small group, in Wellington.

The architects of the credible plan were New Zealands best investment bankers Jardens and Cameron & Co, with their colleagues being the NZ Treasury. Their mission was to save South Canterbury Finance, thus avoiding the losses of public money and the loss of a credible and important South Island money lender. (SCFs losses were underwritten by the Crown)

The Wellington plan was for Treasury to lend 10 year money to SCF and to become a medium term shareholder underwriting the public who might invest in SCF, or who had invested.

Their belief was that over ten years, SCF would recover its stupid property development loans and be salvaged.

The company would survive, no money would be lost, Treasury eventually would be fully repaid with interest, and the South Island would retain a money lender that complemented the banks.

The founder of SCF, by then suffering from a degree of senility probably brought on by cancer and kidney failure treatments, would pledge his assets to SCF and would retire, possibly with the title of Founding President.

Allan Hubbard, the founder, by then frail and in his 80s, would be excised from the recovery plan, but would retain some element of dignity that his previous good work deserved. He was not a common crook though he cut corners that would meet the definition of fraud.

The Wellington plan was that Forsyth Barr would cease to advise SCF but would remain an important broker, raising money for a commission, from the public. SCF was Forsyth Barrs biggest source of revenue, by far.

So the meeting at Wellington Airport in a hired boardroom was held in 2009, attended by telephone by the chairman of SCFs advisor/broker (Forsyth Barr). The recovery plan clearly had legs. It was a credible solution. It would have worked as planned, as time has proved.

A few days later the Wrinkly Ram in Omarama hosted a group of SCF and FB people who met to hear the most improbable alternative plan, which I would describe as the kindling for the bonfire.

That plan was built on the theory that Hubbard would remain the boss, FB would raise equity from his adoring fans, the public would be convinced to invest and FB would remain SCFs advisor and broker.

The assembling of this plan was not FBs finest moment. To be fair today, under the leadership of its new chairman David Kirk, FB is a different beast, much less grasping, than it was in 2009.

The Wrinkly Ram had been chosen as a venue, presumably to escape the public eye.

It is quite accessible to Queenstown where Edgar lived but a long drive from Timaru where Hubbard was as well known as the whereabouts of the local railway station.

Succumbing to vanity and senility, Hubbard voted to hand over to FB and to turn away from Treasurys nascent plan. His was a dreadful decision that destroyed his lifes work.

The decision was sheer idiocy, perhaps not so much as setting the kindling for an arson attack as pouring kerosene on glowing embers.

The Wrinkly Ram is now a financial market heritage site for its role in that billion dollar (plus) unnecessary disaster.

It still makes large cheese rolls and serves its tea made with tea leaves, presented with a strainer, a touch of class in todays world, but it will always be remembered as the cause of a Billion Dollar Bonfire.

_ _ _ _ _ _ _ _ _ _

AS THE Fast Track panel moves into its third week of hearing Santana Minerals resource consent application, the Dunedin newspaper remains committed to its belief that activism is the key to higher circulation figures.

The daily diatribe clearly pleases what the paper considers its audience to be.

Who knows if the paper is right?

The panel will be guided by science and evidence and is likely to be thorough and competent.

It spent many hours last week on the site at Bendigo, the guest of Santana and will probably grant time, perhaps an hour, to all those who have an opinion, in its 140 days of consideration.

Those who shout that mining brings prostitution, drugs, and Saturday night burnouts by drunken louts would be heard with respect if they produced evidence that these undesirable outcomes follow mines around the country.

As far as I know neither Waihi nor Palmerston endure such indignities, but the activists might know better.

The most important evidence will be on matters like water purification, chemical treatment of the slurry from the processing plant, the efficacy of the tailings storage and the respect for Ngai Tahu, along with its runanga and hapu.

Last week the Dunedin commentator and animation software expert, Ian Taylor, visited the mine site at Bendigo.

Taylor is a likeable persona, definitely expert in animation software but very clearly neither familiar with mining, nor with the science that now governs mining behaviour.

During his visit he will have learnt that the chemical treatment of slurry does not lead to any poison being released to waterways.

He will have learnt that the tailings storage is most definitely not creating a giant lake that stores dangerous poisons for 10,000 years.

He now knows that the toxic material is broken down by light within a few days and that as soon as mining stops (in say 12 years) the tailings within days will not resemble anything like cyanide.

He will know that the tailings will comprise around 90% shingle, the outcome of crushed rock, topped by the liquid, awaiting sunlight purification.

Taylor is bright. He knows it would be equivalent to fraud to endorse untrue claims.

It is reasonable that Taylor will continue to oppose the Fast Track process, believing it favours those with the wealth to build their case. His credibility will soar as he refocusses on that opinion, and distances himself from the poorly informed.

Taylor is most unlikely to risk his reputation as an animation software specialist by presenting views that he will now know are based on hysteria rather than science.

The other widely quoted public figures who oppose the Bendigo project will not have the same opportunity to learn about the science of mining unless they visit the mine and listen.

My opinion remains that the respectful inclusion of Ngai Tahu will greatly enhance a project that would enrich the country and the local area, as well as the shareholders, gold price dependent.

_ _ _ _ _ _ _ _ _ _

Travel

13 April Taupo Johnny Lee

14 April Hamilton Johnny Lee

15 April Tauranga Johnny Lee

17 April Napier Johnny Lee

Chris Lee and Partners

Taking Stock 5 March 2026

JUST about every New Zealand investor of a certain age (call it 65 and over) is likely to have had an interest in the affairs of Brierley Investments and its founder Ron Brierley.

Brierley today is a stooped forgetful man in his late-80s, living in the fading memories of his high- profile days.

He has written a vanilla memoir, had 2000 copies printed, and has had the help of an ageing journalist who Brierley knew decades ago.

This item is not a recommendation to buy what is a grey, self-justifying account of a businessman whose public reputation has collapsed as a result of unimaginable flirtations with child pornography.

In summary the book is not worth reading, except by those who want affirmation that Brierley's oddities led to weaknesses, prime amongst which was his quite painful inability to employ people who might offset his weaknesses. The most obvious error he made was to forge a link with Bob Jones, hardly an example of a man who would lead Brierley into better decisions or to a more acceptable lifestyle.

Brierley's image was of one who bought asset-rich companies, applied corporate and strategic skills to add value, and then either held a much better, reformed company or sold it to an appropriate owner.

The image was rarely anywhere near the reality.

More likely Brierley bought under-valued assets from the acquired company, window-dressed the acquisition, then sold it to a "new company" that had not performed competent due diligence. Many of his acquisitions were based on land or property values.

He often built links with ratbags. For example, some of his team linked with Leadenhall Investments, a now defunct private superannuation fund manager, managed by the late Peter O'Neill, a yachtie, a golfer, a champagne drinker and a socialite, and by David Ross, a convicted fraudster. When Brierley planned a takeover, Leadenhall would be pleased to fill the individual Brierley peoples' funds with shares in the takeover target, the Leadenhall managers often filling their own accounts before the takeover was announced. This was in the days when NZ was seen as the wild west.

The target, say DB Breweries, would be selling at $4.70. The takeover price would be $5.70. Those in the know had access to huge personal profits. Fill your boots at $4.70, sell into the Brierley takeover offer at $5.70 a week or two later, and make untaxed capital gains, for all those who decided to harpoon the "goldfish in a bowl".

Not all Brierley cohorts participated. Many did. It was a rotten practice.

Leadenhall was a lousy accomplice. Eventually when its practices were uncovered, it collapsed, but the National Bank kindly bought it for a dollar meaning Leadenhall was quietly closed, rather than disgraced in the public eye.

Brierley himself had become a media darling, granted the status of genius by the media, knighted by the same Labour government that knighted Jones, and Brierley was appointed in 1987 chairman of the BNZ by that Labour government, given the inside running to prepare to buy the government-owned bank for Brierley.

Thankfully Labour's most tuned-in Cabinet member, David Caygill, presided over changes, leaving a truly independent financial market person, Frank Pearson, to chair the dysfunctional bank in 1989.

Brierley says in his book he regretted being sacked as chairman as he had a plan for the bank. My view is that this was a decision thoroughly justified.

Brierley's board of directors included Sky Casino chairman, Rob Campbell, whose background and subsequent careers seemed to me to be odd, for a bank director.

Ultimately the BNZ was sold to the National Bank of Australia, for a price less than half of what the NZ public had paid when it listed. The smart people, recognising the NAB had no sinister plans, sold BNZ and used the proceeds to buy NAB. As is now clear this was a good swap. NAB shares have grown to a value many times their value when it bought BNZ.

It is also worth recalling that in 2008, when the BNZ was again on its knees, NAB fronted with a billion-dollar input to ensure BNZ could meet its commitments. Sometimes having a big brother is a blessing.

Brierley eventually was deposed by the opportunists he had employed and went off to Australia pretending he still had some magic with which to entice retail investors. The company he founded failed, was flogged off to Asia, and is now out of sight, the memory of it an uncomfortable reminder of the awful practices of the 1980s.

Brierley himself, faded, was somehow identified as a porn collector, was charged, found guilty, briefly jailed, and now resembles a broken figure with some high degree of forgetfulness, aged 88.

The aura that had him as a media darling has long disappeared.

The truth is that he was socially gauche, a back-office character, he was able to recognise that if $2 notes were selling for $1 that an easy profit might be made, but was no Warren Buffett.

He was not any sort of a genius, had very poor judgement of people, was inept at executing operational improvements in the companies he bought, and was by nature an analyst, an opportunist, a trader, but very rarely a strategic thinker who would foresee changes, or opportunities to add value with skilled management.

Most definitely Brierley's company was not even remotely similar to a really skilled investment company like Infratil.

The late Lloyd Morrison had created Infratil in 1994, about the time Brierleys was disintegrating.

Morrison was a long-term strategic thinker who succeeded in attracting skilled people and made money by developing the companies he bought. Infratil sought to read cyclical and structural change, an obvious example being changes in thinking on renewable energy, and in more recent times, the growth in value of data security and data centres. He had occasional misfires, but his wins have been huge.

Infratil was to Brierley Investments what Mainfreight is to Move.

Brierley's (final) book is grey, self-focussed, but neither particularly transparent about the company's decision-making processes, or the effect of in-fighting between high-ego executives, nor does it offer in-depth insight into a career that had been leveraged off a mystique built by the media, particularly INL (now morphed into Stuff).

It might have been kinder to restrict circulation of the new book to a few old cronies and his family.

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THE scourge of modern times, scamming and hacking, seems to be a threat to investors and businesses that invades everyday life.

Scammers usually exploit the gullible, establishing their credentials with phoney stories.

We will all recall the Nigerian oil princes who wanted to give us millions, the Spanish raffle we had won (without ever buying a ticket), the romantic correspondent who needed money to ward off a criminal cartel, or the friend who had been falsely jailed and needed bail money.

The vulnerable and the gullible, those who do not have the experience to validate these stories, and the lonely, may continue to be victims.

Hacking is a much harder crime to avoid. Security systems and hard-to-remember passwords can offer a defence but as we know literally hundreds of NZ businesses are hacked every year, the latest being businesses that hold our medical records.

Exploitation of the gullible is not new. An early example came in the 1950s.

My mention of Jones in the previous item will prompt many to recall the 1950s-early 60s pro-forma invoice scandal that enabled Jones, as a teenager, to relieve British companies of hundreds of thousands of pounds and set himself up to become a property mogul.

The late Jones, with the late Laurie Miller (an NZ test cricketer - briefly) and two Lower Hutt characters went to London in the late 1950s to exploit the quite stupid business systems in the city. They invoiced British insurance companies, businesses and banks for advertising that had never been ordered.

The UK systems then had one group of people ordering advertising and some uninquisitive clerks paying bills. Pro-forma invoices were rarely if ever matched with proof of an order by the sales department. The invoices were just paid - money for nothing.

So the Kiwi lads collected hundreds of thousands of pounds by typing invoices on an old typewriter and mailing out the bills. When eventually someone disputed an invoice and reported it to police, Interpol arrived to capture the lads. The typewriter was despatched into the Thames, off a London bridge, the disposal unwisely photographed. The old photo was later displayed to friends as a souvenir of an "adventure" that saw the young men return to NZ with what was then an immense fortune equivalent to at least 100 times the average salary in New Zealand, in each of their pockets. I doubt the four young men visited Britain in the immediate years after their raid.

Of course Jones returned, invested in an option to buy a large Lower Hutt property, leveraging his pocketful, soon after sold the option for a large multiple of cost, and within a decade had a portfolio of cheap properties, often working with his friend Pat Rippon to buy student flats.

Scamming and hacking clearly is not a 21st century development.

Today, most businesses that are hacked are penetrated because of silly passwords or human error / gullibility, perhaps someone responding to a fake "IRD" demand to disclose passwords etc.

Most businesses pay the $50,000 or $100,000 “ransom tax” to the successful hacker, not much different in outcome to what the Brits did in London nearly 70 years ago.

Will we one day develop a portal to our data that requires unalterable personal features - DNA, eyeball recognition, fingerprints, whatever - that removes the threat of invasion?

In my lifetime? Or will Arthur Dailey characters always find a backdoor to enter?

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NOT often am I presented with an opportunity to praise our newspaper groups, so it is nice to record the recent news that both the NZ Herald and the Stuff group are learning to decline advertisements that mislead the public.

When the self-acclaimed financial guru Bernie Whimp sought to advertise his plans to deliver double-digit returns to investors, the NZ Herald, Stuff and The National Business Review declined to run the advertisements.

Allied Press, which runs the Otago Daily Times and some community newspapers, chose to take the promised revenue and allowed some vulnerable members of the public to be attracted to Whimp's offerings.

Now that the Financial Markets Authority has ensured the Whimp funds are closed, pending possible liquidation that Whimp says will wipe out about a third of investors' money, the ODT and Allied Press will be in the spotlight, quite deservedly.

What liability is there for newspapers to be accountable for advertisements a media group chooses to publish. Any? Or plenty? Do I sense a class action might give us a clue?

Whatever the answer to that question Allied Press has shown shocking judgement, leading to at least some people losing their capital in ventures that were, at best, unorthodox and not backed by capital.

It is rare but fair that we acknowledge those who, in contrast, declined the revenue, just as it is fair that we spotlight the Otago Daily Times and its sister community papers, which clearly need new leadership.

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Travel

9 March - Whanganui - David Colman

10 March - New Plymouth - David Colman

11 March - Palmerston North - David Colman

12 March – Nelson – Edward Lee

13 March – Lower Hutt – Fraser Hunter

Chris Lee & Partners Ltd