Resignation after focus on RBNZ

• Author: Jenée Tibshraeny
• Published date: 31 August 2022
• Publication title: New Zealand Herald, The (Auckland, New Zealand)

Byron Pepper recently resigned from the Ando Insurance Group board, further to his joining the RBNZ board on July 1

Finance Minister Grant Robertson, who recommended Pepper be appointed to the RBNZ board, said his involvement with Ando wasn’t expected to create a conflict of interest because Ando isn’t regulated by the RBNZ. Rather, The Hollard Group, which has a 39.95 per cent stake in Ando, is licensed by the RBNZ.

“But to avoid any perception of issues, I understand Mr Pepper has tendered his resignation from the board of Ando,” Robertson told the Herald yesterday when further questioned on the matter.

Ando provides insurance on behalf of Hollard. It works with insurance brokers, assesses insurance claims and takes care of the other operational aspects associated with administering insurance. But customers’ contracts are with Hollard.

The Herald explored this dynamic in an article published on June 30, when Robertson announced Pepper’s appointment to the RBNZ board.

Just over a week earlier, on June 21, the Herald reported on a potential conflict of interest surrounding another appointee to the RBNZ board — Rodger Finlay.

Ahead of joining the RBNZ’s new governance board, which became operative on July 1, Finlay spent more than eight months consulting to the RBNZ as a “Transition Board” member.

Finlay was also chair of NZ Post. NZ Post has a 53 per cent shareholding in Kiwi Group Holdings, which owns Kiwibank.

The RBNZ regulates Kiwibank, ensuring it holds enough capital, complies with anti-money laundering rules and follows loan-to-value ratio mortgage lending rules, for example.

The Herald’s June 21 article included comments from central banking experts who were worried that even though Finlay’s appointment was legal, it wasn’t — in their view — in the spirit of the law.

Documents released under the Official Information Act to one of these critics, Michael Reddell, show that on the afternoon of June 21, an adviser in Robertson’s office wrote to Treasury officials saying media were making inquiries about Finlay.

The adviser said discussions abut any potential conflicts of interest involving Finlay had taken place but weren’t documented by the Treasury.

“As there was a potential conflict of interest, albeit deemed manageable, this should have been noted in the relevant paperwork to inform Cabinet discussions and ministerial decision making,” the adviser told Treasury.

Next day, Secretary to the Treasury Caralee McLiesh wrote to Robertson to apologise...