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>February 2009 Edition ----

Well it seems that we have a new convention. You must not charge anyone money if they have fallen on very sad times. Well a lot of people probably have a natural inclination along these lines but it has been given an official sanction by one John Key, NZ Prime Minister, in his comments concerning the deaths of two 20 year old Australian tourists at Fox Glacier. We deplore such a convention. It is OK for the tourist board or a welfare agency to take over the management of such bereaved or shocked people to negotiate on their behalf or to meet the costs themselves in the short term at least but it is not OK for people who are not directly responsible for the sadness to be expected to forego payment because of the sadness.

We understand that former TVNZ news head and now blogger Bill Ralston has also endorsed this "principle" in the Fox Glacier case. Again we are not impressed. We suspect he was in his news job when we happened to see a Closeup item where the same principle was bought into play which quite disgusted us. It primarily concerned a man who had been a police officer but perhaps had not really been suited for that work or perhaps his faculties were declining in efficiency so he left that and became a taxi owner/driver. He then at some stage decided that he needed an EFTPOS facility in his cab or perhaps the taxi company he was associated with required him to do so, so he contracted with a relatively small family business which offered such a service. The contract was rather like a typical cellphone contract and was for a fixed time, perhaps 4 or 5 years. He was to make regular payments and they were to set up the facility and keep it runniug. There seemed to be no provision for an early exit. Well he put on weight and his health deteriorated so he got out of the taxi business and returned the equipment to the supplier and stopped making payments. The eftpos company sought further payment and an argument developed and then they were told that he had a terminal disease so they toned down their action but kept the account alive and eventually claimed from his estate following his death. The family objected and called in the TV. Knowing this and the power of TV the EFTPOS company apologised and withdrew their claim. David Russell the then advocate for consumers appeared on the program. It was acknowledged that the equipment was probably obsolete and was probably of little use to the Eftpos company. Mr Russell generally believed in sanctity of contract but thought they should not pursue this case. The attitude of the TV staff was similar or stronger.

We say the EFTPOS company had put together a package which would make the service available to as many taxi operators as possible but they had to count on getting payment from all solvent customers. Poverty and ill health is par for the course for certain businesses such as taxi driving. Arguably the cases are virtually all sad but that is about the best that society can do for them. The price will have to go higher or access to the eftpos service cancelled if TVNZ or John Key says that the sadness limit has been reached so no payment should be demanded. The saddest cases will be ex drivers in extreme poverty who fulfill their obligations. No evidence was given of any plight of the family. It was a sadness matter only apparently. It is quite bizarre. The Eftpos business could easily go bankrupt because of this nonsense and may have done so for all we know. Where will it end? Are all funeral bills going to be void?

We hear of widows getting shocked when the final doctors bill comes in for a call-out which was not successful and the like. Perhaps TV notices can be made reminding people in advance that when times are worst the bills keep coming in so they should be prepared for it and seek help where necessary. Hugh fraud can be executed by manipulating this "don't charge sad case victims" principle.

We are thinking of inventing the sadadrometer to give greater objectivity to which sad cases the principle applies to. It should retail for around $80,000. A must for all accountants. It would be worn rather like a pair of spectacles and would have frames that fit close around the eyes particularly the corners. A one eyed version is absolutely not acceptable. The potentially sad story is told to the wearer and any moisture detected is measured and a reading produced. Just who should wear the device we are not sure at this stage. Perhaps a victim of the potential very sad event. Roger Federer's experiences in the final of the 2009 Australian Open is a case that should be tested. Possibly he will be entitled to get off his hotel bill and airfares to and from the event. The most momentously saddest case of all probably is probably the extermination of Jews prior to and during World War II, although massacres in Cambodia and Rwanda in more recent times come close to "rivaling" it . By some sort of application of this sadness principle the United Nations voted to give the Jews their own homeland in compensation in 1947. But rather than the Caucasian nations, members of which conducted the exterminations, making some land available for the new country it was Arab peoples who were expected to do that. Of course the arrangement is not working out and could never have been expected to do so. It is a major application of this sad case principle. People don't feel comfortable criticizing the victims and potential victims of such a terrible event so a sensible decision is not reached. We think the principle has also allowed Jewish people gain a major stake in the wealth stakes. A class of professional victims is allowed to arise.

The Jewish religion is rather different in that it has the concept that they are a special chosen people. They do not exhibit this attitude much except that they interbreed with other races very little and so keep a clear identity over the centuries. Interbreeding is generally a very positive factor in breaking down inter-racial rivalrys. The Christian religion unfortunately tends to give acceptance to the idea that the Jews are a special people by adopting the old testament somewhat. It is time the United Nation examined all religious creeds looking for aspects which are likely to result in disharmony and request that leaders of such religions act to have them modified.

We have no idea of the extent to which the major international finance houses come under Jewish control. We are inclined to think however that Mr Key has gained his wealth not so much by his own cleaver dealing on the financial markets as by him being perceived as being a potential New Zealand leader with sympathy to the Jewish community which he is born into. We think certain securities have been suggested to him and after he has bought in hey presto they have boomed.

This wealth has probably enabled Mr Key to get to the top. New Zealanders like most other people probably tend to think that if they elect a apparently self made wealthy person to be their leader he/she will use their skills towards making them wealthy too although the evidence for it is very flimsy. Many thought that Fay Richwhite were sharing the benefits of their skills when they floated the public company called Capital Markets. But it seems all their bad decisions ended up as being ones done by that company, perhaps retrospectively, while their good decisions "just happened" to be ones that they did on their personal accounts and the company was left out of. Bob Jones's public company also performed very poorly. Well we think Mr Key will perform much better than that although we wonder whether he will have the appropriate NZ perspective on questions concerning Israel and reform of the international commerce system.

Another example of Mr Key's pro victims stance is the intention to introduce a levy of $50 on every criminal conviction with the proceeds going into a pool to assist victims. Rich convicts will do very well out of this miniscule payment we suspect while poor one's might have to offend again to get the $50 (or much more if they stole 10 chocolate bars are were convicted independently for each one) . Sure crime has got to be strongly discouraged but this needs to be done on a person by person basis considering all the facts. This provision increases the gap between the rich and poor and so will increase the incidence of crime. Some crime victims are entirely innocent but many like those who choose to open a one person liquor store have made unwise decisions. Too much "us and them" emphasis by recognising victims can magnify the crime problem. It is a problem for us all.

We are also very concerned about Mr Key's interest in a couple of personal letters written by his Social Welfare minister. No one has alleged that there were any false statements contained in these letters or that she had used her status as an MP inappropriately so we have no idea of why the letters should be the slightest business of his. The welfare minister has been a solo parent we understand and the information that backgrounds the letters would suggest that her success in that role has not turned out to be all that great at this juncture. It is probably somewhat typical however and we would hope it endorses the case for the need of parents to stay together with their mutual children.

It is pleasing to see certain former Feltex Carpets Ltd directors are before the court on criminal charges relating to their declaration of the company's debt situation in a 2005 report. Two charges each for 5 men might mean $500 for the victim's fund. This wrong information probably inflates the market share price for a while so there would be winners and losers. They claim that they took proper advice on the matter. Someone has got to be accountable so perhaps their advisors should be before the court as well. Perhaps the Register of companies can now look at the companies 2004 IPO prospectus. The assumptions footing the projections of income had to be realistic. We say they were not.

One of these directors is Mr John Hagen who has featured extensively on this site. Mr Hagen was an expert witness appointed by the defendants in the High Court case of Hedley v Kiwi . At paragraph 217 of the judgement Mr Hagen qualifications were explained thus. "[217] Mr Hagen is a practising chartered accountant who has advised the dairy industry for a period of some 30 years. He is currently Chairman of Deloitte Touche Tohmatsu and a fellow and past president of the Institute of Chartered Accountants of New Zealand, past Chairman of the Financial Reporting Standards Board, Chairman of the Accounting Standards Review Board, and a former member of the Market Surveillance Panel of the New Zealand Stock Exchange. He has specialised in providing corporate finance advice on acquisitions and divestments, on the valuation of shares, businesses and intangible assets, has undertaken financial investigations and provided litigation support services. Of particular relevance to this case is the fact that he was the Deloitte's partner ultimately responsible for the audit of NZDG, New Zealand's largest dairy company before the GlobalCo merger."

One is lead to wonder whether Mr Hagen's opinion decided the case. Then at paragraph 226 we learn "He [Mr Hagen] said that EY's analysis showed that, without the differential, the Tui shareholders were projected to be approximately 141 c per kilogram of milk ahead of their stand-alone position and even after the differential, approximately 90c ahead. ".

Well a cow gives several kilograms of milk at one milking so these shareholders stood to gain and will have gained huge amounts from the merger according Mr Hagen which was the point the judge was trying to make. We say the true situation was a lot different. Should Mr Hagen be convicted of the charges against him we say this judgement should be reviewed as well.