05 December 2012

McCully appointee should have declared interest

Murray McCully’s angry outburst is just an attempt to divert attention from the fact that a National Party mate he appointed to a state-owned shipping line failed to tell either him or his Ministry that he was registered as a shareholder of a competing company, says Labour’s Foreign Affairs and Trade spokesperson Phil Goff.

“The Foreign Affairs Minister appointed Peter Kiely, a long-standing friend and National Party insider, as New Zealand’s director on the board of Pacific Forum Lines in July 2009.

“Peter Kiely was a key adviser to the Government about the controversial sale of PFL. But he failed to tell the Minister or the Ministry that at the same time he was registered as a shareholder in Sofrana Unilines – the preferred bidder for PFL.

“Murray McCully now claims that doesn’t matter because he was a non-beneficial trustee for Sofrana. But Peter Kiely should still have declared his association with Sofrana.

“The Owner’s Expectation Manual sets out that ‘directors must disclose any relationships and/or matters that give rise to an actual or potential conflict of interest’.

“The fact that Peter Kiely later removed himself as a shareholder of Sofrana at a critical time in the sale process suggests he did in fact in the end recognise the potential conflict that he hadn’t declared to the Ministry.

“Murray McCully, who has a reputation for appointing friends to positions, still has answers he needs to give.

“Why was MFAT unaware of the connection when Peter Kiely was advising them on the sale?

“At what point did Peter Kiely tell the PFL chair that he had an interest in Sofrana? Was it only when the sale was imminent?

“When there was a potential conflict of interest, why was the Ministry, the Minister and the board not immediately informed as required by the Owner’s Expectations Manual.

“Murray McCully should never have appointed Peter Kiely to be guardian of New Zealand’s interests in PFL when he had a shareholding in another private shipping company.

“It’s completely unacceptable. Kiwis deserve better from this Minister. Murray McCully has some explaining to do,” said Phil Goff.

NOTE: Pacific Forum Lines was set up in 1977 to ensure there were regular, affordable shipping services in the Pacific region. It was designed to foster trade in the Pacific Islands and to provide competition so that private shipping operators did not create a monopoly in the region. There are 12 owners, including New Zealand, which has a 23% stake in the company.

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