'Perceived conflicts of interest' in Eke Panuku board probed in PwC inquiry

PwC has been charged with probing dealings with Eke Panuku Development Auckland. Photo /supplied

Auckland Council has asked consultant firm PwC to examine potential conflict of interest allegations levelled at its own real estate entity, Eke Panuku Development Auckland, over land dealings in the city.

Ngāti Whātua Ōrākei Whai Rawa board chair Michael Stiassny complained about "potential conflict of interest" situations with board members over land transactions.

He wrote to Phil Wilson, the council's director of governance and council-controlled organisation partnerships, about the situation.

Stiassny expressed "our serious concerns at the conflicts of interest on the board of Eke Panuku and the potential impact of those conflicts on the fairness of its process for sourcing and evaluating development proposals".

Wilson said the matters would be investigated by PwC.

The complaint "is very serious given that, for us, integrity matters are paramount", Wilson wrote on June 3 to Grant Kemble, Whai Rawa's new chief executive.

"We have decided the matter needs to be looked at independently on our behalf as shareholder...to ensure maximum confidence in the outcome both for yourself and for ours. And late this week, we have briefed PwC to do this work. Specifically, they have been asked to do a full review of EP processes for managing conflicts of interest, the decision-points and accountabilities for specific matters in the development cycle, whether declarations of other mitigations are adequate and critically where there is evidence of inappropriate management of conflicts," Wilson wrote.

Michael Stiassny complained about potential conflicts of interest. Photo / Jason Oxenham

Stiassny was copied in along with the council's chief executive Jim Stabback and others.

One of the transactions complained about was the sale of Eke Panuku Avondale land to the Marutūahu-Ockham Partnership.

Eke Panuku chairman Paul Majurey (Ngāti Maru, Ngāti Whanaunga, Ngāti Tamaterā, Ngāti Pāoa) declared a conflict of interest and left the meeting where that was discussed. Majurey is a lawyer of law firm Atkins Holm Majurey and chairman of the Tāmaki Makaurau Collective of iwi.

"PwC have indicated the process would take four to eight weeks to complete thoroughly," Wilson wrote.

The Herald understands no report has yet been made available.

Eight transactions were complained about but documents say in each case the conflicts of interest were disclosed and the directors involved absolved themselves of taking part in any aspect of the transactions.

A number of current and previous Eke Panuku directors were cited in the list of eight projects Stiassny cited. Those included Majurey, Victoria Carroll, Martin Udale, Adrienne Young-Cooper and David Kennedy.

Stiassny said "as a result of these processes, property development businesses with people placed on the Panuku board may enjoy an advantage".

Public sector organisations must avoid conflicts of interest "and be manifestly seen to do so; otherwise, those who deal with them cannot have confidence in them", Stiassny wrote.

Plans for the Avondale land - one of the deals complained about. Photo / supplied

Wilson told Stiassny in a July 8 letter that if deficiencies were found in Eke Panuku's management of conflicts of interest "we expect that any required changes will be made with urgency. Regardless of the outcome, we will raise with the appointment committee for future consideration whether to continue to appoint directors to Eke Panuku that are currently active in property development".

Grant Kemble, chief executive of Ngāti Whātua Ōrākei Whai Rawa. Photo / Dean Purcell

But Wilson also stressed to Stiassny that directors of council-controlled organisations were appointed for a broad range of experience and expertise.

"While we are absolutely keeping an open and mind to possible changes, we feel we have a reasonable basis to assume that the processes are working as expected unless or until we received advice to the contrary," Wilson wrote to Stiassny in July, copying in Kemble as well.

Stiassny's complaint relates to sourcing and evaluating development proposals.

Mayor Phil Goff wrote to council chief executive Jim Stabback in May on Stiassny's complaints.

Goff asked Stabback to ask the risk and assurance team to look into the matter and check that compliance and good practice had been adhered to.

Majurey, when asked to comment about the situation, told the Herald the PwC review was commissioned on conflict of interest policies, not individual conduct.

"From the outset, the council wanted to have Eke Panuku governance which is representative of property development and urban regeneration business expertise because that is its core business. This is not the first time there have been such reviews as its important the CCOs have best practice processes to manage conflicts," Majurey said.

Eke Panuku had taken considerable care to manage conflicts, particularly at the board level, so having an external advisor review those processes is helpful for continuous improvement, he said.

"We are in the development/regeneration business and there are often parties who, when they miss out on a project, want to raise questions. It is important then to be open to reviewing the process as we are," he said.

The Herald has requested to see the PwC inquiry when it is available.