(Bloomberg) — The watchdog overseeing Norway’s central bank renewed its criticism of how a new chief executive was appointed for the country’s $1.1 trillion sovereign wealth fund.
The head of Norges Bank’s Supervisory Council told key lawmakers gathered for a rare parliamentary hearing that risks remain for conflicts of interest and that rules were broken when hedge-fund manager Nicolai Tangen was hired to head the fund. Tangen is due to start his new job on Sept. 1.
The watchdog “doesn’t share the view” of Norges Bank that possible conflicts of interest between the wealth fund, Tangen’s firm AKO Capital LLP and his personal assets have “for all practical purposes been eliminated,” Julie Brodtkorb, the head of the Supervisory Council, said in the webcast hearing on Monday.
The central bank, which manages the fund, has broken both ethical principles and transparency laws in the appointment process, and may also have breached the central-bank act in providing insufficient information to the Finance Ministry, she added.
Tangen’s appointment come under fire almost from its announcement in March. The watchdog, some policy makers and other observers have criticized different parts of the hiring process, with most of the debate focusing on how Tangen would create Chinese walls between his wealth, estimated at about 700 million pounds ($900 million), AKO (where he will remain the biggest owner) and his new job.
Norges Bank governor Oystein Olsen repeated in comments to the parliament’s Finance Committee on Monday that the risk of conflicts had been all but eliminated, although he conceded there had been “learning points along the way.”
After the hearing, the committee may decide to ask the Finance Ministry to take some form of action, though the threshold for challenging the central bank’s prerogative to hire the wealth fund CEO appears to be high. The Conservative-led minority government has so far been careful not to get drawn into the debate, and its ally in parliament, Progress, has already made clear it’s satisfied with the terms of Tangen’s contract.
The opposition Labor Party, the parliament’s biggest group, has yet to decide on whether it will push for the committee to get the government involved, its deputy leader Hadia Tajik said by phone before the hearing.
The Supervisory Council, whose members are appointed by parliament, doesn’t have the power to overrule the central bank’s decisions.
©2020 Bloomberg L.P.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.