Pressure grows on Norway's new wealth fund chief to divest hedge fund stake

OSLO (Reuters) - The businessman appointed to lead Norway's $1.1 trillion sovereign fund should not be allowed to take up the job unless he divests his holdings in a hedge fund, the opposition Labour Party told daily VG and broadcaster NRK on Friday. Norges Bank in March announced that Nicolai Tangen would take over the running of Norway's rainy-day assets from September, while putting his own 43% stake in London-based AKO Capital into a blind trust

Reuters August 15, 2020 01:08:52 IST
Pressure grows on Norway's new wealth fund chief to divest hedge fund stake

Pressure grows on Norways new wealth fund chief to divest hedge fund stake

OSLO (Reuters) - The businessman appointed to lead Norway's $1.1 trillion sovereign fund should not be allowed to take up the job unless he divests his holdings in a hedge fund, the opposition Labour Party told daily VG and broadcaster NRK on Friday.

Norges Bank in March announced that Nicolai Tangen would take over the running of Norway's rainy-day assets from September, while putting his own 43% stake in London-based AKO Capital into a blind trust. Tangen has ruled out selling his AKO stake.

"We've concluded that the risks of conflict of interest are too great to be compatible with taking up that position," Labour leader Jonas Gahr Stoere told NRK.

Labour is the largest opposition party in Norway and the narrow favourite to win elections next year.

The central bank was not immediately available for comment.

The appointment was the subject of a contentious hearing in parliament on Monday, in which Norges Bank's supervisory council, a watchdog appointed by parliament, sharply criticised the appointment, while central bank Governor Oeystein Olsen defended it.

Labour's criticism puts significant pressure on the centre-right minority government, although its formal powers to directly intervene in the hiring process are limited.

Julie Brodtkorb, who heads the council overseeing the central bank, on Monday told parliament that there had been "a breach of guidelines, regulations and laws" during the hiring process.

Norges Bank has admitted to being too slow in releasing Tangen's name as part of a public list of applicants for the job to head Norges Bank Investment Management (NBIM), which is mandated by law.

Defending the appointment however, Olsen said Tangen is now only a passive investor in AKO and that any potential conflicts of interest had been "eliminated for all practical purposes".

The sovereign wealth fund, the world's largest, owns about 1.5% of all listed global equities and is worth three times Norway's annual gross domestic product, making its investment returns vital to the country's public finances.

Tangen's surprise appointment thrust the 54-year-old, whose private wealth is estimated at more than $500 million, into the limelight in Norway.

(Reporting by Terje Solsvik, editing by Gwladys Fouche and Steve Orlofsky)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.