The majority of the board of Government-owned electricity company Synergy has quit, leaving the utility in limbo just seven months after its merger with generating company Verve.
Four members of the board, including chairman Michael Smith – who are among the State’s most respected business leaders – quit over governance concerns.
Mr Smith, who also chairs telco iiNet, resigned a week ago on Monday, July 14.
Deputy chairman Eric Hooper and directors Margaret Seares and Keith Spence resigned three days earlier on Friday, July 11.
Despite the resignations taking effect between a week and ten days Synergy’s website still lists all as directors and Dr Nahan has made no announcement.
The walkout means there are just two directors of Synergy still serving, Mark Chatfield and Mark Goddard. Both men are Dr Nahan appointees.
“Yes, that’s right,” Mr Smith told thewest.com.au this morning when asked if he had resigned.
“I can’t say too much. But certainly I resigned a week ago.
“The Minister indicated that he would look at another model of chairmanship.”
While Mr Smith declined to comment further, sources have told thewest.com.au there were differences between the Minister and the former directors around the governance of the utility.
With a review of the WA energy system, commissioned by Dr Nahan, supposed to be completed by the end of the year, there are concerns about whether the Minister has reached a predetermined outcome.
“He is very keen on two gen-tailers,” a source said of Dr Nahan’s view of the future of the state-owned energy company.
While the resigned directors were not opposed to such a future, a source said they said such a decision would need to be underpinned by evidence, governance, and good process.
Another source said Dr Nahan had been “running around telling everyone” he wanted to see the company split in two, with each company having some generation and some retail assets, to be sold to major Australian energy utilities like Origin or AGL.
Dr Nahan’s office has been contacted for comment.
Of the remaining directors, Mr Chatfield has said publicly both before and after his appointment to the board by Dr Nahan a year ago that he believes the utility should be split and sold.
Mr Smith was chairman of the old retail company Synergy before the Government’s decision in April last year to merge the companies.
He was chair of the merged board from July 2013. The merger of Verve and Synergy took effect from January 1.
Shadow energy minister Bill Johnston said the board walkout was “clearly a vote of no confidence in the Minister”.
Mr Johnston questioned the Government’s failure to disclose the information, saying that if it was a public company it would be in breach of timely disclosure laws.
“If the board of Synergy don’t have confidence in the Minister, I don’t see why West Australians should have confidence in the Minister,” he said.
“There is a real question about why the Minister … has hidden these facts for over a week. This is typical of the Barnett Liberal Government, that they hide bad news and only talk about good news.”
Premier Colin Barnett said there was “nothing improper” about the Government failing to announce the resignations more than a week after they happened.
He also ruled out any future changes to the structure of Synergy, seemingly putting him at odds with Dr Nahan, who is so far yet to confirm whether he still believes the corporation should be split and sold.
In a front page story in The West Australian last September, Dr Nahan outlined a long term blueprint for the merged Synergy that would see the merged entity split into two or more competing companies within five years.
Dr Nahan was repudiated within days by Mr Barnett, who told Parliament the next week: “ There is no plan to merge and demerge and then privatise the utilities. That is simply not Government policy.”
Today, Mr Barnett tried to suggest leadership changes were initiated by Dr Nahan, despite the fact the directors resigned.
In a statement, Dr Nahan said: “There is no doubt that there have been disagreements on the Synergy Board but the bottom line is that the merger of Synergy and Verve has delivered significant cost savings to this point and we are determined to continue with our reform program for the benefit of all West Australian,” said Dr Nahan.”
Resigned board member Ms Seares said: “I don’t support the (Minister’s) proposed changes to the governance structures. I think the organisation was going in the right direction.”