Hard & fast

by Karl du Fresne / 27 June, 2013
Insolvency specialist Michael Stiassny has been brought in to sort out MediaWorks, the troubled company behind TV3. What drives this “corporate hard man” who also has a social conscience?
Michael Stiassny
Photo/David White

Outside politics, few names seem to arouse more antagonism than that of Auckland company chairman and insolvency specialist Michael Peter Stiassny.

To put it mildly, he seems to rub people up the wrong way. Consider the following:

• Litigious US businessman Vincent Siemer waged a long and virulent campaign against him, attacking him via a website and a billboard that was prominently displayed in downtown Auckland. The High Court found Siemer guilty of defamation and awarded Stiassny $825,000 in damages, a New Zealand record.

• As chairman of electricity lines company Vector, Stiassny faced down a 2008 boardroom revolt by independent directors Tony Gibbs, John Goulter and Greg Muir – themselves heavy hitters in the business world – who resigned after declaring their lack of confidence in him. Muir described his style as aggressive.

• At a 2010 meeting of troubled property company DNZ Property Fund, of which Stiassny is a director, he was confronted by an angry female shareholder who addressed him as “you pompous man” and told him: “get over yourself”.

• In 2011, when he was New Zealand Racing Board chairman, Stiassny was the target of offensive emails and phone messages from leading bloodstock agent Rob McAnulty. A Judicial Control Authority hearing was told McAnulty left a message on Stiassny’s voicemail saying: “Now take your Zionist view and f--- off out of our industry.”

• Comments about Stiassny in the blogosphere are often luridly defamatory and flagrantly anti-Semitic (he is Jewish).

• In 2009, the normally mild-mannered investment analyst Brian Gaynor compared Stiassny to the communist leadership of North Korea after he banned cameras and recording devices from Vector’s annual meeting.

Michael Stiassny with Mark Franklin of Vector and NZX CEO Mark Weldon, 2005
Vector chairman Michael Stiassny (left) with CEO Mark Franklin and NZX CEO Mark Weldon in 2005. Photo/Glenn Jeffrey

You get the picture, then. This is not a definitive list, merely a representative sample.

Business reporters routinely describe Stiassny as “blunt”, “hard-nosed” and a “corporate hard man” – journalistic code for someone who kicks heads, metaphorically speaking.

Yet people who know him well speak of another side. They describe a man with a social conscience and a genuine concern for New Zealand’s economic and social well-being.

He has allies in unlikely places. His friends and supporters include a high-­profile Labour MP and a leading shareholders’ advocate.

Though he is widely seen as a pillar of the Auckland business establishment, Stiassny doesn’t hesitate to challenge the status quo. He pushes for greater diversity on company boards, criticises shoddy corporate governance, talks about the importance of raising the South Auckland underclass out of ­poverty and thinks business should get over its antagonism toward trade unions.

Some who know him suggest one of the reasons he arouses antagonism is that he’s good at what he does. As the senior partner in the New Zealand office of KordaMentha, an international firm that specialises in what it calls corporate recovery, Stiassny is arguably New Zealand’s best-known receiver: the man who’s called in to clean up the mess when companies such as Crafar Farms collapse. His latest assignment, in tandem with Korda­Mentha partner Brendon Gibson, is to sort out troubled TV and radio company MediaWorks.

It’s a specialised field in which it’s easy to make enemies. Receivers are commonly seen as hired guns, earning stratospheric fees as a result of other people’s misfortune or bad judgment.

But there’s more to Stiassny’s CV than receiverships. He chairs Tower Insurance as well as Vector, has served on other high-profile company boards and was shoulder-tapped by the Government to whip a dysfunctional Racing Board into shape.

His services are valued by Maoridom, too. Waikato’s Tainui tribe called Stiassny in to salvage its financial affairs after a series of bad investments, and he serves on the board of the company that looks after the assets of the Auckland-based Ngati Whatua iwi. His fingerprints are everywhere.

Stiassny (left) and KordaMentha colleague Brendon Gibson at a press conference about MediaWorks. Photo/Dean Purcell

Given the hostility towards him in some quarters, it would be understandable if Stiassny were media-shy, but he grants an interview request readily enough – ­albeit after expressing curiosity about the Listener’s motives for wanting to talk to him.

On the phone he’s almost exaggeratedly blokey, addressing me as “mate”. But in person he seems strangely ill at ease for one so accustomed to being in the public eye. He’s guarded, though not unfriendly.

He’s not naturally loquacious or articulate. Answers to questions are often preceded by long – very long – pauses, as if he’s struggling for the appropriate response.

But as the interview progresses in Korda­Mentha’s 16th-floor boardroom above Queen St, Stiassny loosens up. A cup of tea is offered. After an hour he’s amiable, almost chatty.

This reporter had had contact with him once before, though not face to face. As a small shareholder in a company that went belly-up in 2009, I had written to Stiassny – whose firm acted as receivers – asking why no one had had the courtesy to contact shareholders and explain what had happened to their money.

He wrote a polite letter in reply explaining that receivers had no obligation to provide updates to shareholders. But he did attach a copy of KordaMentha’s initial statutory report.

Of all the people involved in the company’s failure and winding-up, Stiassny was the only one who took the trouble to communicate. It seemed to reveal a different side of a man often criticised as having no time for niceties.

Reminded of the episode, Stiassny reacts as though he wouldn’t want it widely known he had revealed a soft spot. Writing individually to shareholders every time a company collapsed would incur substantial extra costs, he explains. “Do we spend our time writing letters to shareholders, or do we maximise returns?” There’s no doubt in Stiassny’s mind about his duty as a receiver: it’s to get the best return possible for creditors.

Shareholders in a failed company, he reminds this naive investor, are the last people in the queue.

Stiassny’s parents were among the hundreds of Jews who fled to New Zealand to escape Nazism. His father was from Vienna, his mother from Germany; the family name is of Czech origin. Stiassny says his father would probably have preferred to go to New York, but the ticket said New Zealand. He arrived here on Waitangi Day, 1940.

Stiassny, 56, attended Glendowie College and obtained degrees in accounting and law from the University of Auckland. He and his wife have three children – two at university and one still at home.

Coaxed into answering questions about the nature of his work and its potential for arousing enmity, Stiassny concedes ­receiverships often result in casualties. Then he adds: “It would be really nice if we got companies really early, before they went into receivership, and we turned them around. We’ve had some of those – that’s really rewarding.”

Did he find the $200 million Crafar Farms receivership challenging? Yes, he says, it was demanding in that it was different – “one of the very few large agricultural receiverships. I didn’t ever expect that animal welfare would be such an issue, but it’s more common than it should be.” It also became highly political, he says, because the ultimately successful bid from Chinese interests was contested by a New Zealand group led by Sir Michael Fay.

It’s clear he didn’t relish the political and media attention.

Was he satisfied he achieved the best possible outcome? He gives a slightly sardonic laugh. “Do you want me to say I did a bad job?”

Ultimately the decision hinged on who was prepared to pay the best price. “At the end of the day, the pricing was pretty good, and that’s how we should be judged.” It’s a point he comes back to several times: his first responsibility is to maximise the return – to ensure creditors of the failed company are paid off as best as they can be. “It’s that simple when you cut through it all.”

Is he comfortable being in the public eye? He thinks again and laughs uncertainly. “I’d prefer not to be, but it comes with the territory. You have an option – you can get out.”

What about the personal animosity directed at him, then – does that also come with the territory? No, it doesn’t, he says, otherwise his partners would cop it, too.

The best explanation he can offer is that he’s “fairly clear” in his thought processes and comfortable debating them, which can lead to “polarisation” – all of which seems another way of saying he’s blunt and sometimes gets people’s backs up.

John Barnett, Andrew Little, Tony Gibbs
Clockwise from above left, John Barnett of South Pacific Pictures; Labour MP Andrew Little; former Vector director Tony Gibbs. Photos David White/Ross Setford/Greg Bowker

He was more succinct at the time of the Vector boardroom bust-up. “I am a very black and white character,” he told the New Zealand Herald. “I can be very hard, clear and precise. I am very big on outcomes.”

The campaign against him by Siemer, which has raged for years and led to Siemer serving a jail term for contempt of court, began when disagreements arose after Stiassny was appointed receiver of Paragon Oil Systems, in which Siemer was a shareholder.

During the defamation trial, the High Court was told Siemer had made repeated accusations about Stiassny’s business practices, ethics and personal relationships.

It got intensely personal, with Siemer and his supporter, Penny Bright, an Auckland activist, staging protests outside Stiassny’s home in St Heliers. High Court judge Mark Cooper said Stiassny had been subjected to “vile, racist abuse” and his children had been harassed and intimidated.

Notwithstanding Stiassny’s tough image, a source says he took Siemer’s attacks very personally; “they really upset him”.

Stiassny offers to talk about Siemer off the record, but there seems little point.

Asked whether the descriptions of him as hard-nosed and abrasive might be right, Stiassny pauses – again – before answering. “I’m there to do something for someone and I expect everyone else to be there, in a sense, to do the same thing.

“What am I expected to do – let someone buy Crafar Farms for less than market [price] because I know them, or because it’s very nice? Am I expected to sit at a boardroom table and say we’re not going to maximise returns to the shareholders because we can’t be bothered, or it’s time for a cup of tea? What am I meant to do here?”

He answers his own question. “Every­thing’s very simple – the world’s quite simple. We’re only there to make a return for the long term. That’s why you get out of bed: it’s to make money.”

Such statements make him sound ­fixated on making money to the exclusion of all else, but those who know him say that’s not the case.

Labour MP Andrew Little first met ­Stiassny when Ansett New Zealand collapsed in 2001, threatening hundreds of jobs. Stiassny was appointed receiver and made an immediate impression on Little, who was then national secretary of the Engineering, Printing and Manufacturing Union.

“He was very direct and very open,” Little recalls. “He didn’t mollycoddle people – he gave it to them straight, but he was very good to deal with. He provided information as best he could and he made himself available. That made it easier to deal with a very stressful situation.

“As a union leader, I preferred to deal with people who were realistic about a business’s prospects and what was necessary to save it. If it means you have to get rid of a few frontline positions, that might be a bitter pill to swallow, but sometimes it’s what’s needed to rescue a business.”

Little and Stiassny had further dealings in 2005, when more than 600 engineering jobs were threatened by Air New Zealand’s decision to contract maintenance work on long-haul jets to overseas companies. “He contacted me wanting to assist,” Little says. “He didn’t want New Zealand to lose such a highly skilled business.”

Stiassny and his colleague Gibson came up with a compromise proposal that saved hundreds of jobs. “He demonstrated a set of values that obviously appealed to me,” says Little, who adds that the two became firm friends.

“Yes, he’s a very smart, hard-nosed businessman, but that’s underpinned by a set of values about what’s good for New Zealand economically, and that’s where we coincide. There’s more to him than just a corporate head-kicker.”

Little also admires Stiassny’s toughness and independence. “He’s absolutely focused on the interests he’s there to represent, and if that means standing up to people who would otherwise be regarded as his allies, or people he has an affinity with, he’ll stand up to them. I admire that, and he does it without fear or favour.”

As an example, he cites the way Stiassny held out against the Fay-led bid for Crafar Farms – one that was patriotically more appealing, but financially less attractive, than the Chinese one. That’s what his clients hire him for, Little says.

But he adds that Stiassny has a social conscience and will preserve jobs wherever he can. “He stands out as having a core set of values that I find myself in agreement with.”

A long-standing friend and business associate, film and TV producer John Barnett, echoes much of what Little says. Stiassny is totally focused on outcomes, Barnett says. He adds that receivers don’t have time to sit around discussing ­philosophical niceties.

Barnett is co-owner with Stiassny of the successful South Auckland-based hip-hop record label Dawn Raid, which they rescued from financial failure in 2007. He diplomatically describes his friend as having a “shorthand” way of doing things that some people may not be used to. “I think he’s much maligned by people who don’t get what he’s trying to do.”

Barnett attributes Stiassny’s boardroom clashes to the fact that he’s prepared to be direct. “The whole New Zealand psyche is about not upsetting the apple cart. The failure to say ‘no’ is a really big failure.”

Another who speaks positively is John Hawkins, chairman of the New Zealand Shareholders’ Association. Though emphasising he’s speaking personally rather than on behalf of his members, Hawkins says he supports Stiassny’s insistence on high standards of corporate governance.

It’s a subject on which Stiassny has made typically blunt speeches, including one earlier this year in which he applauded the jailing of some finance company directors. He also criticised a “consensus culture” in company boardrooms and singled out failed state-owned company Solid Energy as one whose board should have kept a tighter rein on its chief executive.


“He’s strong on good governance and won’t cut corners on that,” says Hawkins. “A lot of the stuff we think is important, he thinks is important, too.”

Stiassny also gets a tick of approval for encouraging greater diversity in boardrooms. He’s a member of the 25 Percent Group, which is pushing for more women in senior management and board roles, and has thrown his weight behind Future Directors, an initiative aimed at exposing a wider variety of people – women, younger people, ethnic minorities – ­to boardroom experience.

His supporters see this as evidence of a progressive mind, but there’s a hard-headed business logic to it, too.

“We’re out of date, you and I,” Stiassny says. “Do old men have any idea how 18-22-year-olds who play IT games think? How do I listen to those people? How do I get their input? Not by hiring them and getting them to report to the board, because they’ll get shit-scared and say what they think we want them to hear. So diversity [in the boardroom] makes absolute sense.”

Stiassny has views on issues beyond the boardroom, too, such as socio-economic challenges in South Auckland. He talks about the need to lift people out of poverty, get them into employment and ensure children are properly fed (“I might even have to agree with Hone Harawira on that”).

He enthuses about the “phenomenal” work – supported by Vector – being done by the Manaiakalani Trust, which provides digital learning opportunities to children in low-decile, multicultural schools.

He also talks about the importance of getting Maoridom moving in the right direction and the dilemma facing iwi such as Ngati Whatua, which settled its Treaty claims earlier this year. “They could give everyone quite a bit of money, but is that going to help the tribe?”

Maoridom has money and is learning very fast, he says, but there’s still tension between those who want a hand up and those who favour a handout.

This is a side of Stiassny that’s seldom seen. Hawkins says of him: “He has a passion for wanting New Zealand to progress and become strong and have social equity for everyone. He regards a strong business sector as just a means to an end.”

His critics see him as a fully paid-up member of the Auckland business establishment, part of an elite circle – consisting of company directors, judges and lawyers – that looks after its own. But that’s not how Stiassny sees himself, and the reason is interesting.

“I’m not a member of the club … well, I might be a member of the club now, but I’m still an outsider.”

Is that really how he sees himself – as an outsider? “Always – I’m a Jew.” He laughs, but you sense he’s not really joking.

Has he encountered open anti-Semitism? “Of course.” Socially, professionally? That question produces the longest pause yet. “Socially you don’t actually see it. Professionally you do.”

What form does it take? “Oh, people make statements or references to my religion, yeah.” To him directly? “Some in writing, or references about me to other people by my race.”

Surely it’s not a widely held attitude? “Oh, hell no. I’m not losing sleep about it.”

It’s not only Jewish people who encounter prejudice, he says; Maori, Polynesians and Asians cop it, too. “We’re exceedingly racist, don’t you think?” Later he remarks: “It would be really nice if we were all more tolerant, but I don’t think we are.”

An authoritative Auckland business source describes Stiassny as one of the hardest businessmen in New Zealand to work out. “He’s a complex man. People completely misread him.”

The source suggests his Jewishness helps explain his character. “The Jews have been persecuted through history,” he says. “Michael can take a confrontational, defensive approach and I think his Jewish background has got something to do with that.” He adds that Stiassny is part of a tight Auckland circle of Jewish families who have been highly influential in business.

The Listener’s source also says Stiassny is uncomfortable in social settings and often says things that are taken the wrong way. “I can see how that would upset people. That’s the way he is.”

For that reason, he suggests Stiassny is not naturally suited to the role of company chairman. He’s not accomplished at small talk and is “hopeless” performing the meet-and-greet role at annual company meetings.

But the source has a high regard for him as a receiver, saying he has handled receiverships that were not only big but also politically sensitive, such as the US$621 million winding-up of the Central North Island Forestry Partnership in 2003.

He says Stiassny and his team from KordaMentha would have worked behind the scenes for some time on the recent MediaWorks receivership, in which no jobs were lost and everyone was likely to be paid. The source described that as “a wonderful outcome – an example of the system working well”.

Back on the 16th floor of the Tower Centre, the interview is winding up when the conversation turns to an Auckland politician. The previously reticent Stiassny suddenly comes to life, describing a recent speech by the man in question as “f---ing awful”.

It’s a brief glimpse of the hard-boiled, outspoken Stiassny. But then he insists the tape recorder be turned off.

A shame. Just as it was getting interesting.


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