“Strong cost” and “sharp criticism” of Norges Bank – VG

On Monday morning, Norges Bank received a very critical letter from the Supervisory Board, which is the bank’s supervisory body. “Historically tough,” said Sp leader Trygve Slagsvold Vedum, while Aps deputy director Hadia Tajik calls for a full cleanup on all unresolved issues with Nicolai Tangen.

– This was a strong diet, says Professor of Law Hans Petter Graver from the University of Oslo to VG.

The letter signed by the Chairman of the Supervisory Board, Julie Brodtkorb (H), on Monday morning and sent to the Governor of the Central Bank, Øystein Olsen, has several critical points about employment in Tangen:

** The main board must obtain complete documentation on tangens personal business operations, prior to the expiration of the final employment agreement with Tangen at the Executive Board meeting on May 27.

** The Supervisory Board believes that it is “Very unfortunate” Tangen was said to break all ties to the AKO system, while the submitted documentation shows that he remains the primary owner and has voice control at AKO Capital.

– The use of a feature that is “very unfortunate” in that context is a very strong criticism. I’m having a hard time seeing how the bank can live with Tangen as the leader of Nbim after this, Graver says.

Nbim is short for Norges Bank Investement Management, which manages the Petroleum Fund.

Norges Bank, on behalf of Tangen and Olsen, does not wish to respond directly to comments in this article. They refer to a press release on their websites today (see end of case).

– Sharp criticism

Norges Bank’s Executive Board has not resolved conflicts of interest with Nicolai Tangen as head of the Petroleum Fund. On May 27, the bank will present a proposal to the Executive Board on how this should be resolved so that an employment agreement with Tangen can be concluded.

According to NHH professor Guttorm Schjelderup, the criticisms of the Supervisory Board are defamatory and well-founded.

– It is rightly claimed that potential conflicts of interest have not yet been resolved, says Schjelderup, professor of economics and head of the Center for Tax Research at the Norwegian School of Economics in Bergen.

Schjelderup does not recall that the Norges Bank Supervisory Board has been as critical as it is now in the case of hiring a new head of Nbim, which manages the Petroleum Fund.

– The Supervisory Board letter is a sharp criticism of the Norges Bank Executive Board in various circumstances when Nicolai Tangen is employed, says Schjelderup, who is supported by Graver in this review:

– The Supervisory Board says that it still has interests in AKO Capital and that the possibility of conflicts of interest should be eliminated. It’s hard to imagine how to do this, says Graver, adding:

– It almost means saying from the Supervisory Board that it is incompatible to be an administrator of oil funds while having ownership interests, he says.

Graver emphasizes that being “eliminated” is a very strong requirement. The Supervisory Board writes that full transparency regarding investments and ownership positions is “vitally important.” That is also an important requirement, according to Graver.

– The Supervisory Board also doubts whether it is possible to obtain full transparency, when the money is placed as they are in tax havens. They say that full transparency is crucial. If they don’t have full transparency, they think that work is not compatible, he says.

– Does this mean that Tangen cannot become an oil fund manager without breaking all ties to the AKO system and withdrawing from companies registered in tax havens?

– The Supervisory Board seems to think so, says Graver.

– They go very hard towards the bank when they say it is “very unfortunate”. That is a very strong criticism, he says.

– worrying

– In Olsen’s response letter to the Supervisory Board, Olsen says the starting point is that Tangen will no longer have control over AKO’s management. Olsen may appear to believe that is sufficient, but it is unclear whether the Supervisory Board will be satisfied. I read that the Supervisory Board makes stricter demands on Tangen to avoid conflicts of interest than Olsen and the Norges Bank Board, says Guttorm Schjelderup.

– I think it is worrying that the solution that Tangen himself has suggested does not break all ties and that the Supervisory Board also seemed to think, he adds.

The Supervisory Board has noted several different bonuses:

• The statement by Tang’s lawyers that Tang’s 100 percent tax exemption for charitable gifts, the AKO Foundation, is essential to the organization in the future.
• “The Supervisory Board believes that these conditions show that Tangen does not sever all ties to the AKO system,” writes Brodtkorb.
• «Directly and indirectly, Tangen will remain the primary owner and will have voting control at AKO Capital, despite the fact that he does not receive financial dividends while employed at Nbim, ”he continues.
• The requirement of the Supervisory Board is that conflicts of interest between the Petroleum Fund and its operations “Eliminated throughout the period of employment and within a reasonable time after resignation.”

The Supervisory Board also notes the information that Tangen will not pay AKO Capital to manage its assets, while Tangen is the administrator of the Petroleum Fund:

They note that Tangen will personally not receive interest, dividends, or other financial returns as long as he administers the Petroleum Fund. However, the owner’s actions will continue until it ends again in the Oil Fund.

“Therefore, Tang will have interests in the AKO system as long as he is employed as general manager of Nbim,” they write.

The other main highlighted challenge is the vision of Tangier’s tax havens and investments:

“It is not clear and documented to what extent it is possible to verify and verify the facts through established regulatory regimes and tax treaties,” writes the Supervisory Board.

They are critical of whether the ownership of companies registered in tax havens can be reconciled with the requirements of transparency and transparency.

– The Supervisory Board asks if an unskilled third party can verify the facts and possible conflicts of interest. In my opinion, it raises questions about what the path is like, if all uncertainty cannot be removed. Norges Bank relies on trust both domestically and internationally, says Schjelderup.

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Norges Bank: ongoing process

Norges Bank does not wish to comment directly on this article. They point to one press release on its website that was released on Monday morning. Øystein Olsen says on his own website that work is being done to establish the necessary distance between the Oil Fund, the AKO system and Tang’s personal wealth.