PwC has been appointed by Auckland Council development agency Panuku to carry out a review of some of its practices after the Serious Fraud Office (SFO) raised concerns about the actions of chief executive Roger MacDonald.
The issue centres around the sale in June of the historic council owned Civic Administration Building by the Council Controlled Organisation (CCO). Auckland Mayoral candidate John Tamihere questioned the sale of the council building for $3 million and lodged a complaint with the SFO about the deal.
In July the SFO cleared the CCO over the sale, but it did raise questions over hospitality provided to MacDonald by Tawera Group.
When the Council first announced it was looking at selling the building in 2016 Tawera Group was expected to buy it. But in May this year it was sold for $3 million to Civic Lane Ltd, which is owned by Tawera Group’s chief financial officer John Love and his wife Josephine Love. As part of the deal Civic Lane has been given a 5000 square metre property adjoining Mayoral Drive that's expected to be used to develop a hotel.
Review of practices
Panuku says it has now appointed PwC to carry out an "independent review" of its gifts and hospitality policies and it has drafted the terms of reference for the inquiry. Its latest board report from August 30 states:
“In response to the SFO suggestion, the board agreed to an independent review of gifts and hospitality.
“The board noted the intense scrutiny on how Panuku conducts our business. The Panuku Board formally instructs staff to not accept any invitations at this time unless discourteous and disrespectful, until the review is completed.”
According to Panuku the review is already underway and a draft report is expected to be presented to the board in "the coming weeks".
Helicopters and hospitality
In July the SFO said MacDonald had joined Tawera Group chairman Mike Mahoney for a day sailing in the Millennium Cup in January 2017 in the Bay of Islands, which included a helicopter trip, accommodation in a Russell motel and a meal.
The SFO said even though the events took place after the 2016 sale agreement was finalised it still raised the clear potential for a perceived conflict of interest.
A statement released by Panuku board chairwoman Adrienne Young-Cooper at the time stated:
“Although the SFO acknowledged that acceptance of this invitation did not impact any decisions made by Panuku, it did advise that it could create a perception of impropriety. The board accepts the SFO’s suggestion that it should review the gifts and hospitality policy and procedures and will appoint an independent party to complete this focussed review.”
Auckland Mayor Phil Goff says when the issue first came to light in July he stated that MacDonald’s behaviour was unwise and inappropriate. But he says any further comment on the issue should come from Panuku. But Tamihere says Panuku shouldn't be appointing the organisation carrying out the review and says for that reason it's hardly independent.