Call for letter copies refused

Press, 30 January 1986, Page 6

Call for letter copies refused

By

SIMON LOUISSON

in Wellington

The Reserve Bank has refused a request under the Official Information Act for copies of a letter sent by Rakiura Holdings to the bank regarding its $lOO million default. In a letter explaining its refusal, the bank’s deputy governor, Dr Rod Deane, says the act places an obligation on the bank to “protect official information to the extent consistent with the public interest and the preservation of personal privacy.” The bank says it has good reasons for the refusal.

“In our view the competitive commercial activities of the bank would be prejudiced if the document was released.” The bank did not wish to prejudice its competitive position by discouraging participation in the tender system when other financial institutions and overseas borrowers have no obligation to release correspondence with customers.

Dr Deane says that if companies which do business with the bank believed correspondence was at risk of release they would be less willing to supply the bank with information.

“We wish to avoid approaching the markets in an information vacuum,” he said.

“The letter in question relates to competitive commercial activity (its release could result in considerable harm to the commercial interests of those identified in the letter).”

Dr Deane says the bank can perceive no circumstances of the case where the benefit from withholding the letter is outweighed by making the letter publicly available. The bank did, however, release copies of Rakiura’s application for exemption from the deposit

requirements under the tender scheme.

The bank revealed that Rakl'ira’s letter regarding its default sets out claims that Rakiura had made “arrangements (orally) with a third party which fell through after the tender had been accepted.”

The bank neither confirmed nor denied the existence of correspondence with a third party named in the request for information by “The Press.”

In Rakiura’s application for deposit exemption four directors of Alexander Associates are named as authorised people to

sign bids.

Mr Alan Frost, one of the directors named, says that at no time did the Alexander Associates directors work for Rakiura.

Mr Brian Alexander, Rakiura’s principal shareholder, was under a management contract to Alexander Associates at the time and was a director between June and September, 1984. Mr Frost says their names are on the form because Alexander Associates was not officially formed until April 30, 1984, and until then they did their tendering through Rakiura Holdings.