Part 3: Chronology of events

• Introductory meetings between CPIT and BSL
• Meetings between CPIT and BSL from June to August 2003
• Preparations for the TIME and COOL programmes
• Negotiations to set up the Joint Venture
• Implementation of the COOL programme
• Establishment of the Joint Venture Committee
• Summary

3.1
In order to determine whether conflicts of interest emerged from the business relationship between CPIT and BSL, we sought to understand the chronology of events (including key decision-making points) that led to the establishment of the Joint Venture, and the delivery of the COOL programme.

3.2
In this Part we provide a summary of those factual events.

Introductory meetings between CPIT and BSL

3.3
Up until April 2003, no formal relationship existed between CPIT and BSL. However, the Chief Executive of CPIT, Mr Scott, was aware of both BSL’s existence and Ms Buck’s association with BSL (in the context of his knowledge about her other directorships and interests).

3.4
Ms Buck introduced the Dean of the CPIT Faculty of Commerce to the Managing Director of BSL at a cafe on 30 April 2003. The meeting provided BSL with an opportunity to demonstrate the TIME programme. Each of the participants told us that at this meeting Ms Buck orally disclosed that she had a “foot in both camps”. After the meeting, the Dean sought the advice of some of his faculty colleagues about the TIME programme, and arranged for it to be demonstrated to them.

3.5
A subsequent meeting attended by these 3 individuals as well as Mr Scott, was held at CPIT on 22 May 2003. Those present told us that early at that meeting, Ms Buck again orally declared her conflict of interest. At that point, Mr Scott asked Ms Buck to leave the meeting – which she did. Mr Scott told the Managing Director of BSL that his interest was in the broader BSL information technology platform and the potential joint business opportunities that could emerge from CPIT and BSL working collaboratively (as opposed to CPIT simply purchasing the “right” to deliver the TIME programme).

Meetings between CPIT and BSL from June to August 2003

3.6
Between June and early August 2003, a series of meetings was held between CPIT representatives and BSL to assess the quality of the BSL information technology platform and to discuss the potential for a formal business relationship between the two parties. The meetings involved staff from CPIT’s Academic, Development Centre and Finance Divisions.

3.7
This was the most important stage in the development of the business relationship between CPIT and BSL. It was during this time that CPIT senior management conducted some due diligence on BSL. They then came to the conclusion that they wanted to pursue a formal business relationship with BSL. Based on our interviews and CPIT documentation, we are satisfied that Ms Buck was excluded from these discussions in their entirety.

3.8
On 20 August 2003, the CPIT Council was advised of CPIT management’s intention to “formalise a commercial relationship [with BSL]…while moving forward quickly to develop some successful online products”. A draft Joint Venture Agreement was first circulated by BSL to CPIT for its consideration near the end of August 2003.

Preparations for the TIME and COOL programmes

3.9
In the meantime, CPIT proceeded to deliver the TIME programme to secondary school teachers. The Faculty of Commerce gave academic approval for the first two courses of the TIME programme in mid-June.

3.10
On 16 June 2003, Ms Buck sent an e-mail to the Head of the School of Computing in the Faculty of Commerce in which she offered to assist with CPIT’s preparations for delivering the TIME programme, and stated that she had a conflict of interest. There is no evidence that her offer of assistance was taken up. She told us that her role in the TIME programme was only in relation to facilitating the introductions between CPIT and BSL representatives.

3.11
A contract between CPIT and BSL for delivery of the TIME programme was signed on 3 July 2003, and delivery of the programme began in mid-August.

3.12
At some point during the June-August 2003 discussions, CPIT representatives identified an opportunity for the TIME programme to be adapted to a wider market (see paragraph 1.20). This resulted in the concept of the COOL programme.

3.13
During August, preparations began for the delivery of the COOL programme. It became clear in August that the COOL programme was to be run as a “trial between now [August] and December”.

3.14
CPIT pursued the COOL programme because it was consistent with CPIT’s e-learning objectives, was considered to be innovative, and would potentially help CPIT to exceed its 2003 revenue target. Ambitious targets of 1000 EFTS were set for the programme.

3.15
The applications for academic approval of the COOL programme are dated 18 August 2003. A contract between CPIT and BSL for the COOL programme was signed on 21 August 2003.

3.16
From mid-August 2003, Ms Buck took a lead role in the arrangements to market the COOL programme to stakeholders outside CPIT.

3.17
At the start of one CPIT staff planning meeting for the COOL programme on 19 August (the first such meeting that Ms Buck attended), there is evidence that Ms Buck made an oral disclosure of her conflict of interest. Her disclosure was not recorded in the minutes of the meeting. However, based on our interviews, we are satisfied that this disclosure took place. In an e-mail to some of those same CPIT colleagues the day after the planning meeting, Ms Buck made reference to her progress as the CPIT Development Manager in marketing the COOL programme, and developments at BSL “with a different hat”.

Negotiations to set up the Joint Venture

3.18
The negotiations between the parties over the details of the Joint Venture Agreement took place from August to mid-September 2003. Based on our interviews and our review of CPIT documentation, we are satisfied that Ms Buck was not involved in these negotiations. She received copies of some emails, but there is no evidence of her engaging in the negotiations.

3.19
In early September, BSL sought CPIT’s consent for Ms Buck to represent BSL on the Joint Venture Committee. Both Ms Buck and CPIT sought legal advice on this matter at the time. The tenor of both sets of legal advice was that Ms Buck’s membership of the Joint Venture Committee would not be unlawful.

3.20
Ms Buck was appointed to represent BSL on the Joint Venture Committee. Both BSL and CPIT told us that she was representing BSL’s, not CPIT’s, interests on the committee.

3.21
The CPIT Council considered a paper about the Joint Venture at its 17 September meeting, and was given a demonstration of the capabilities of the BSL information technology platform by the Managing Director of BSL. The minutes of that meeting record the Council being advised that Ms Buck would be representing BSL on the Joint Venture Committee. The Council’s involvement in the Joint Venture establishment process and knowledge about the delivery and scale of the COOL programme is discussed in Part 6.

Implementation of the COOL programme

3.22
The COOL programme received academic approval from the CPIT Faculty of Commerce on 5 September 2003. This made the COOL programme eligible for funding from the Government. Further work occurred during September on the implementation arrangements for the COOL programme. Ms Buck was closely involved in these arrangements.

3.23
The first enrolment activity for the COOL programme was registered on the CPIT student management system on 22 September 2003. On the same day, the COOL programme was demonstrated to the Chair of the Tertiary Education Commission.

3.24
The COOL programme took its final enrolments around the 2004 New Year period.

Establishment of the Joint Venture Committee

3.25
The first meeting of the Joint Venture Committee was held on 26 September 2003. At this meeting, Ms Buck reminded those present that she had a conflict of interest as both the Development Manager for CPIT and as a company director and shareholder in BSL. As with the 19 August meeting, this disclosure was not recorded in the meeting minutes. Again, after interviewing the participants, we are satisfied that this declaration of her dual connections was made at this meeting.

3.26
The signed Joint Venture Agreement is dated 7 October 2003. The CPIT Council was advised at its November meeting that the Joint Venture was in place, with the agreement details still being finalised. The Council was also told that the COOL programme enrolments were “going extraordinarily well…it is likely that between 2 to 3 million dollars will have been generated by year end”.

3.27
The Joint Venture is still operating, and is developing new products to “take to market”. It has always been CPIT’s intention to use the capabilities of the BSL information technology platform to assist CPIT to achieve its e-learning goals.

Summary

3.28
Overall, we found that there were two streams of activity occurring from April to December 2003 involving both CPIT and BSL. First, CPIT and BSL were establishing a formal business relationship through a joint venture. Second, the individual parties – and later, the Joint Venture – were preparing to deliver the COOL programme. The two streams of activity ran in parallel – rather than the Joint Venture business relationship being formally established before it was decided that the COOL programme would be delivered. The development of the COOL programme and the business relationship were separate but closely related activities.

3.29
The trail of decision-making is not easy to follow. CPIT representatives found it difficult to pinpoint for us a substantive “go” position for either the Joint Venture or the COOL programme. However, we accept that these types of business arrangements often come out of an evolving process.

3.30
Based on the evidence we have, it seems that the parties had effectively committed to developing a substantial business relationship through a joint venture arrangement, and to running the COOL programme as a pilot, by early-August 2003. The substance of the Joint Venture arrangement had effectively been agreed by early-September.

3.31
Ms Buck orally disclosed her “foot in both camps” – being the Development Manager for CPIT as well as being a company director and shareholder in BSL – a number of times from April to September 2003. While we found that only one of these disclosures was in writing, Ms Buck never attempted to disguise or hide her interests in BSL. All of the evidence corroborates this.

3.32
As soon as Ms Buck had facilitated the introduction of the two parties, a disclosure was made, and then again later (several times) when she became a key CPIT representative in the planning for, and actual delivery of, the COOL programme.

3.33
Ms Buck appears to have had little involvement during the critical period when CPIT decided whether to enter into a formal business relationship with BSL. Once this decision was taken, Ms Buck became involved in the governance of the Joint Venture business relationship, and the COOL programme.

3.34
A summary of the order of key events is provided in Figure 2 on the next page.

3.35
It is clear that Ms Buck identified and disclosed her interest in BSL to CPIT on a number of occasions. In Part 4 we discuss our findings about these interests and how they were managed by CPIT.

Figure 2
Summary of key events in forming the CPIT and BSL relationship