Why filing accounts are important – EPMU comes clean, but where did the $6.6M go?

A post by the Owl

Background – for all readers of the Owl know that I am 100% behind members of Unions and my bone of contention always started when Gary Parsloe and Helen Kelly asked me as a taxpayer and ratepayer to support them against the POAL.

I have written that “okay if you want my support I would find out a bit about you” I very innocently looked up MUNZ’s and NZCTU’s information on the incorporated societies website only to find it was either missing, incorrect and members where getting short-changed.

NZCTU has 30 plus affiliated unions and a number of them have just not complied with the law of the land. Once again I question the governance at the top of the NZCTU.

Now after a year the EPMU have ,under instructions from the Registrar, finally filed their full accounts from 2005 and as expected their previous “cut and paste” and “excel accounts” never showed the true story to the public.

Remember this was the same time that Andrew Little was their National Secretary, he remained the head of the union until 2011 as well as maintaining his role as Labour party president from 2009.

Observation from the Owl

One of the big debate from their “cut and paste” set of accounts was a loss on the balance sheet of $6M. We can now reveal why. Please remember a number of CA’s have also blogged on WOBH about their inability to make sense of the original accounts filed.

The NZEBA Limited issued shares of $6.6M to the EPMU then the EPMU wrote off the value of the shares.

Questions the Owl would be asking if I was a member.

  1. Had the NZEBA Limited accrued $6M of losses and then shares issued to cover the debt?
  2. Why issue 6M shares only to write off the value?
  3. How can a simple business of being a “bargaining agent” end up costing $6M?
  4. Why wasn’t the full set of accounts filed correctly with the Registrar from day one especially when the EMPU had full audited accounts in their offices?
  5. Who was running NZEBA Limited?
  6. What was the outcome of the 2005 tax audit?
  7. Why was $1.0M of software investment written off?

As always – all information is freely available in the public domain (in this case a few years late).

The Owl’s assistant also asks:

Why does a Union Subsidise side businesses whose results are hidden from members other than via the consolidated figures.

If I was a member I would want to know about each subsidiary especially ones where $6,000,000 goes. But in the EPMU caser there are four entities in the consolidated result with no separate accounting for each one.

The mixing of entity types does not work well.

In this case we have an incorporated society owning two companies and charitable trust and Journalists Prize fund (normal trust I think).

The point is that it a structure where money could be sucked out of an entity to associated parties without any accountability. This was the prime accounting failure in finance company collapses and how can anyone know it is happening here.

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.