Hon Dr Michael Cullen
Minister of Finance

3 July 2008 Media Statement

John Key misleads public over shares sale

John Key must explain why he claimed yesterday to have not commented on Tranz Rail as a Member of Parliament while he was a shareholder in the company when it has been revealed he did just that, Finance Minister Michael Cullen said today.

Yesterday John Key denied that comments he made on 18 June 2003 about Tranz Rail represented a conflict of interest because he had sold his shares ‘earlier in the year’.

He said yesterday that he had sold the shares before he began commenting on the issue to avoid any appearance of conflict of interest.

After the government called on Mr Key to give the exact date of the sale of shares to clear up any confusion, his office has confirmed he did not sell the shares until sometime between 9-12 June 2003.

However, Mr Key did indeed comment publicly on Tranz Rail without disclosing his shareholding interest. On 9 April 2003, he stood up in Parliament during question time and asked Dr Cullen:

What instructions has the Minister issued to Treasury regarding the many secret meetings they have held in recent months with Tranz Rail's management, and can he confirm the reasons that all proposals to spend the $30 million allocated to Transfund in the alternatives to roading scheme have indeed been stonewalled by him to ensure Cabinet had the resources to buy back the tracks, once Treasury reports back to him in a month?

Dr Cullen has said it is time for Mr Key to explain why he grandstanded yesterday about selling shares before making public comment – going as far as to demand an apology from the Prime Minister- when he was guilty of doing exactly what he was accused of.

“The moral high ground is dangerous place for Mr Key to lay claim to,” Dr Cullen said. “Yesterday he was all bluster, talking about selling his Tranz Rail shares before making comment on the future of our rail system.

“The truth is he misled the public, Parliament, and the media with his performance yesterday. He had not disclosed his shareholding interests when seeking information that went right to the heart of Tranz Rail’s commercial viability. We are owed an explanation.

After all it was Mr Key himself who said:

It might be a bit uncomfortable, but if I am a shareholder of Tranz Rail and I want to get up in this House and start talking about that company, then my shareholding is relevant. [John Key, 16 Oct 2003 Members of Parliament (Pecuniary Interests) Bill ]

Attached: Key shareholding timeline

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Timeline of Key’s Tranz Rail share conflict

February 2002 –

Key buys 30,000 shares in Tranz Rail, owners of New Zealand’s rail system

October 2002 –

Key asks series of Parliamentary Questions relating to Tranz Rail and the future of the rail track. Ministers reply to questions. His shareholding interest is not disclosed.

9 April 2003 –

In Parliament at Question Time, Key asks detailed question of Finance Minister seeking information about ‘secret meetings’ between the government and Tranz Rail. His shareholding interest is not disclosed.

9-12 June 2003 –

Key sells Tranz Rail shares.

18 June 2003 –

Key attacks government over Tranz Rail and plans to buy back the track. Recent shareholding interest is not disclosed.

16 October 2003 –

Key says in debate over Pecuniary Interests Legislation:

It might be a bit uncomfortable, but if I am a shareholder of Tranz Rail and I want to get up in this House and start talking about that company, then my shareholding is relevant.

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