The New Zealand Superannuation Fund has defended its stake in a roading contractor which is alleged to have provided $250,000 worth of travel to a former Auckland Transport manager convicted of corruption charges.
The Super Fund said it has a 9.21 per cent stake in Hiway Group through private equity firm Direct Capital which manages some investments on its behalf.
The taxpayer-funded investment body said it was confident there has been no improper behaviour or improper use of public funds by Hiway since the Super Fund first invested in the company in 2011.
The Super Fund should be seeking an assurance from the Serious Fraud Office that nothing untoward has occurred
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Two local politicians believe the stake in Hiway is inappropriate as the contractor allegedly provided 19 holidays between 2007 and 2012 to a public official convicted of taking bribes from another roading company.
Hiway Group has not responded to questions from the Herald about the travel costs, which came to light during a bribery and corruption trial in the High Court at Auckland.
Witnesses in court said Hiway Stabilizers - one of two main operating companies for Hiway Group - provided Auckland Transport manager Barrie George $250,000 worth of travel.
The Serious Fraud Office decided not to investigate Hiway in its probe of bribery and corruption at the former Rodney District Council and Auckland Transport's road maintenance division.
Last September, George was sentenced to 10 months' home detention after pleading guilty to accepting $103,580 in cash, travel, accommodation and entertainment from roading contractor, Projenz.
George's boss Murray Noone and Projenz managing director Stephen Borlase were last month sentenced at the High Court in Auckland to five years and five years six months respectively after being found guilty of bribery and corruption.
Court transcripts said Hiway Stabilizers and Projenz shared the costs of some of George's travel.
The Super Fund said Direct Capital had alerted it to the SFO investigation in March 2014 and was satisfied with the way they had managed the issue.
In a statement, Direct Capital director Mark Hutton said one of its funds made an initial investment in Hiway Group in December 2011 and three subsequent investments, taking its stake in the group to 60 per cent. He said due diligence was undertaken each time and did not raise any issues of concern.
"Direct Capital has reconfirmed it is confident Hiway has at all times during the time of its investment acted to the standards expected of all investee companies. The industry investigation by the SFO has reviewed company records relating prior to and post the initial investment and no further action has been taken.
"In addition, Direct Capital, after further review, is not aware of any matter where the company has not met the standards demanded by its representatives," Hutton said.
He said there had been no improper use of Direct Capital's, or its investors, funds.
A Super Fund spokeswoman said: "We retain confidence in Direct Capital and their investment processes, and have relied on their assurance to us that there has been no improper behaviour by the company during our investment period, nor any improper use of our funds."
The Auckland councillor for Rodney, Greg Sayers, and Rodney Local Board member Colin Smith did not believe taxpayers should have a stake in Hiway Group until the Barrie George travel matter was fully resolved.
"The Super Fund should be seeking an assurance from the Serious Fraud Office that nothing untoward has occurred," says Sayers.
Smith, a retired roading contractor, said the Super Fund should not be funding Hiway "and I think ever taxpayer in New Zealand would agree".
The Government Superannuation fund and ACC also have investments in the Direct Capital fund.