FMA recorded Allen’s role in SkyCity talks as potential conflict of interest
Aug 6 (BusinessDesk) – Financial Markets Authority chairman Simon Allen’s role in negotiating the government’s convention centre for pokies deal with NZX-listed SkyCity Entertainment Group was recorded as a potential conflict of interest, the regulator says.
Allen, a former investment banker who has chaired the market watchdog since May 2011, took a key role in talks with the casino and hotel group, according to papers released by Ministry of Business, Innovation and Employment Minister Steven Joyce last month.
He was enlisted by Joyce to strengthen a government negotiating team that was up against a formidable line-up of SkyCity executives with experience winning gaming concessions in Australia and Asia. SkyCity gained extra slot machines and a 27-year extension to its exclusive licence in Auckland as part of a deal to build the $402 million convention centre.
“Simon Allen disclosed his role in relation to SkyCity to FMA and it has been recorded as a potential conflict of interest under FMA’s conflict of interests policy,” Liam Mason, FMA board secretary, said in an emailed statement. “FMA has rigorous conflict of interests policies for its board and staff, to maintain confidence in the integrity of the organisation.”
Joyce told BusinessDesk last month that he tapped Allen, who he met as chairman of Crown Fibre Holdings, after he became minister following the 2011 election, to give the government negotiators “some stronger commercial expertise.”
The talks had ground on since SkyCity first made its proposal in September 2010 to fully fund a national convention centre in exchange for a list of wide-ranging concessions. That list was virtually cut in half by the time a heads of agreement was signed this year. Prior to Allen coming on board, the company and government officials couldn’t even agree on what had been said at meetings they both attended, papers show.
Mason said the regulator’s board members “are chosen because of their diverse range of experience in the financial markets, ensuring that FMA’s governance is well-connected to the markets it regulates.”
Allen is a veteran of financial markets, having founded and run ABN Amro New Zealand and chaired the NZX until 2008. His name first appears in a Jan. 18, 2012, note to Joyce from the Ministry of Economic Development which says he “is now assisting MED with the negotiations.” The papers show he was in direct talks with SkyCity chief Nigel Morrison during the negotiations.
Shares of SkyCity fell 0.5 percent to $4.22 on the NZX today and have gained 12 percent this year. The stock is rated a ‘buy’ based on the consensus of eight analysts polled by Reuters.