Feb. 27 (Bloomberg) -- New Zealand’s Maori Council, which represents indigenous groups, lost its bid to delay the partial sale of Mighty River Power Ltd., the first such privatization planned by Prime Minister John Key to cut the budget deficit.
The Supreme Court of New Zealand, the country’s highest court, was unanimous in its ruling, upholding the decision of High Court Justice Ronald Young who dismissed the Maori challenge on Dec. 11.
New Zealand’s government wants to speed up a return to surplus by raising at least NZ$5 billion ($4.1 billion) from selling as much as 49 percent of Mighty River, Genesis Power Ltd., Meridian Energy Ltd. and Solid Energy New Zealand Ltd. over the next four years. Some Maori say the sales violate the 173-year-old Treaty of Waitangi, New Zealand’s founding document that gave the indigenous people rights to land and resources.
“The partial privatization of Mighty River Power will not impair to a material extent the Crown’s ability to remedy any treaty breach,” the five-member panel said in its ruling. “Similar issues will arise in relation to the partial privatization of Meridian Energy and Genesis Energy.”
The Maori Council and groups supporting it claimed the asset sales would be unlawful because they ignore outstanding indigenous claims to freshwater and geothermal resources. The companies make power from resources including rivers and underground steam in areas of scenic beauty.
Young ruled the courts couldn’t review parliament’s decision to change the status of the companies from state-owned to mixed-ownership models to allow the sale. The Supreme Court panel disagreed with the lower court judge on that point, saying the decision was reviewable.
Mighty River’s partial sale is scheduled for the second quarter of this year, Finance Minister Bill English said in a statement after the ruling. The listing will benefit the nation’s capital markets, he said.
Shares in NZX Ltd., the operator of New Zealand’s stock exchange, rose after the ruling was released around 3 p.m. local time. They increased 6 New Zealand cents, or 4.8 percent, to NZ$1.31 at 4:09 p.m. in Wellington.
Key’s sale program is New Zealand’s biggest since the government raised about NZ$10 billion between 1988 and 1990, including the sale of Telecom Corp. of New Zealand Ltd. to U.S. phone companies, government figures show.
New Zealand’s government is targeting a return to budget surplus by 2014/15. The country lost its top credit rating at Standard & Poor’s and Fitch Ratings in 2011.
The case is Between The New Zealand Maori Council and The Attorney General. SC98/2012. Supreme Court of New Zealand (Wellington).
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