(Oslo) REUTERS: The businessman appointed to lead Norway’s US $ 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 percent 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 yesterday, 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, yesterday 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 percent 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 US $ 500 million, into the limelight in Norway.