As you will see from the following extracts taken from various publications, the current situation is nothing new and bears many similarities with what is happening now.
The Save Mt Ruapehu group firmly believe the same as the original RAL founders group, that the solution to this current situation lies in all the passionate mountain users coming together to crowd fund the ski field operations.
We believe it is imperative that any future profit of the company is invested back into the company to develop further facilities that enables the promotion of skiing as a sport and the promotion of Mt Ruapehu in general. In addition, we believe that no one stakeholder should hold a controlling stake in any new company.
This approach has worked successfully for some 70 years, longer than most businesses in NZ.
EARLY SKIING POPULARITY
Sir Edmund Hillary opening the No 1 chairlift 1954
The popularity of skiing grew rapidly in the post-war environment as people had discretionary income once more and began to travel freely. On weekends and holidays hundreds of people gathered on the ski slopes of Mt Ruapehu.
The limited facilities were completely overtaxed. The Ski Council of New Zealand continued to press the Government about the need for improvements such as more ski lifts and high altitude chalet accommodation but the message was slow to sink in.
Walter Haensli had been impressed by the network of tows and facilities at Coronet Peak.
He realised that the Tourist Department had failed to seize the opportunity at Mt Ruapehu and the pace of development at this government-run resort had fallen behind the development at Coronet Peak. He believed something needed to be done immediately to help keep the skiers at the Chateau, otherwise they would choose to ski in the South Island.
In 1951 Haensli began to actively seek support for a major ski lift development at Mt Ruapehu. There was a reason for urgency because at least three ski clubs, Ruapehu, Aorangi and Tongariro, were considering installing rope tows. Haensli believed that if individual clubs pursued their own small developments it would discourage investment in a more major undertaking and might use up too much valuable skiing territory.
Instead, Haensli strongly recommended that the clubs work together to make a joint effort to improve the facilities at Ruapehu. Fortunately, this view was supported by Ruapehu Ski Club president Jim McComish representing the largest and the oldest ski club (founded in 1913) on the mountain.
Haensli's friend, Auckland dentist Dr Fergus Taylor, shared his passion for establishing decent facilities at Mt Ruapehu. In 1951, Taylor discussed the matter with Auckland solicitor John Horrocks who offered to help Haensli free of charge with the legal applications to obtain a licence from the Tongariro National Park Board. Had it not been for Taylor and Horrocks' commitment and assistance, Haensli says he may have dropped the matter. He returned to Europe and spent part of the northern winter investigating and obtaining quotes on chairlift equipment.
During the winter of 1952, while based at the Chateau Tongariro in Whakapapa Village, Haensli finalised his survey work involving the extent of the ski area and the route of various lift facilities. A core group (comprising Haensli, Fergus Taylor, John Horrocks, Bryan Todd, Peter Ellis and Morrie Collier) continued to meet at the mountain to progress the development at Mt Ruapehu. Bryan Todd personally endorsed and arranged meetings for Haensli with the appropriate Government officials to allow him to outline his plans for a ski field development.
Eventually Haensli gained the tentative approval of the Minister of Internal Affairs, the Minister of Lands and the general manager of the Tourist Department.
On 1 November 1952 the Tongariro National Park Board, at its annual general meeting at the Chateau, announced its decision to grant an option to obtain a licence to Walter Haensli "to establish and operate chair lifts and ski tows on the Mt Ruapehu winter sports fields together with other transportation facilities and general amenities for the sport and recreation of users of the mountain”.
RAL THE COMPANY
The licence now became the catalyst to form a company. This needed to be done within one year, with paid up capital and provisional directors in place. Bryan Todd led the way seeking advice from his team of financial and legal advisors about what kind of company to form.
NON PROFIT OR FOR PROFIT?
Tax expert Dr Gert Lau, advised the companies income could be exempt from income tax if it was "established for the purpose of promoting amateur sport conducted for the recreation of the general public, or for the purpose of developing tourist amenities, and as long as no part of the net income was used for any other purpose.”
Todd was in favour of forming a public company rather than a private one. Peter Ellis remembers Todd saying “we don’t want to be seen to profit from our friends.” All agreed that tax exemption would provide a unique facility for building up the financial strength of the company as earnings which would otherwise go in taxation could be retained for future developments.
They also recognised that the exemption meant the shares of the company would be non-dividend bearing and thus make them more difficult to sell. The tax-free status was hard won. It was a critical point which has underpinned the company’s operation ever since.
The consent of the Minister of Finance was obtained on the understanding that the subscriptions be obtained from members and parties interested in the promotion of ski sports. Any profits which might be gained from the company’s operations were to be invested back into the company to develop further facilities so as to continue the promotion of skiing as a sport and the promotion of Mt Ruapehu in general.
FORMATION OF THE RAL BOARD
Several meetings took place before the final composition of the board was settled. In the summer of 1952/53 the provisional board of the new company was appointed. It comprised the original group of keen Haensli supporters: Bryan Todd, Morrie Collier, Fergus Taylor and Peter Ellis.
The presidents of three leading Ruapehu ski clubs also joined the board: Jim McComish from Ruapehu Ski Club, Dr Alistair MacFarlane from the Tongariro Ski Club and Albert Scotney from the Aorangi Ski Club.
Three prominent figures in the New Zealand ski industry made up the last three places on the ten-person board: Dick Duncan, president of the NZ Ski Council, Roy McKenzie, secretary/treasurer NZ Council and Douglas Naish, NZ Ski Council Year Book editor.
The NZ Ski Council officially endorsed the scheme and wholeheartedly recommended it to all the ski clubs for support.
THE ORIGINAL CROWDFUNDING MODEL
The company's exemption from income tax was noted in the prospectus. The capital of the company was fixed at £52,500 divided into 5,000 non-profit shares of 10 shillings each to be known as members shares, and 5,000 mortgage debentures of £10 each bearing interest at the rate of 6 percent per annum, payable yearly.
A minimum subscription was stipulated in the prospectus which stated “the directors will not proceed to allotment unless and until 3,300 members' shares and 3,300 mortgage debentures of £10 each have been subscribed”.
The next step was now for Haensli to transfer his licence to the new company and he signed a contract formalising his agreement with the company on 19 August 1953. His new role now was to work full time to procure the capital for the company.
The transfer of the licence enabled RAL to become incorporated on 1 September 1953 and a company prospectus was filed.
Under the licence this gave the new company only two months to secure sufficient capital to fund the company. At least 3,300 of the 5,000 members shares at 10 shillings each and 3,300 of the 5,000 mortgage debentures of £10 needed to be sold urgently.
GOVERNMENT AND BANK FUNDING
It was a major blow when the Government turned down a request for a direct capital contribution of £25,000, half the required debenture capital.
Todd was a very important client of the National Bank of New Zealand (now ANZ) who were also RAL’s bankers. John Horrocks considers that the Todd guarantee was absolutely vital saying that: “the company would have failed financially within five years had Bryan Todd not taken this extraordinary generous step”.
Shares in RAL were not an easy investment to sell because the no-tax/no-profit basis of the company also meant there were no dividends or profits to be made, although 6 percent interest was promised on the mortgage debentures. Member share capital needed to be obtained by 15 October 1953 on which date RAL’s option expired.
SKI CLUB ASSISTANCE & SUCCESS!
The ski clubs came to the rescue. For instance, the president of the Otaihape Ski Club, Dr Alan White, wrote to members saying it was imperative that further capital be obtained by this date and he urged that investments be made promptly. In the end sufficient capital was raised mainly through hundreds of small subscriptions made by skiers from all over the country.
(An extract from Barrel Staves to Carving Skis written by Karren Williams. Published in 1999 by Fire and Ice Publications)
“Hundreds of RSC members were founder shareholders in RAL, investing amounts both small and large by way of share capital and debentures. RAL only once paid a dividend and otherwise profits were ploughed back into new lifts, but hardly anyone complained about the lack of dividends”.
“And so the company known as Ruapehu Alpine Lifts Ltd was launched, thus confounding the wise heads and pessimists”.
(Extract from MT RUAPEHU 100 YEARS OF SKIING written by Alan Graham, published March 2013 by Balasoglou Books)