OSLO (Reuters) - The businessman appointed by Norway’s central bank to run the country’s $1.1 trillion (841.7 billion pounds) wealth fund will transfer his stake in a hedge fund to a charitable foundation and restructure his other investments in a bid to keep his job.
The move, announced by Norges Bank and new fund CEO Nicolai Tangen on Monday, was immediately backed by the finance ministry and could defuse a crisis that has threatened to unseat both Tangen and central bank Governor Oeystein Olsen.
“I want to be CEO of the oil fund, and have only one objective: creating wealth for future generations,” Tangen said.
The hedge fund veteran told a news conference that after his planned divestments, he would still have bank deposits of about 7 billion crowns ($778 million).
The announcement in March that Tangen would become a civil servant and run the world’s biggest sovereign fund from Sept. 1 triggered a backlash from a watchdog that oversees the central bank and lawmakers concerned about conflicts of interest.
The fund owns about 1.5% of all listed global equities and is worth three times Norway’s annual gross domestic product, making its investment returns vital to public finances.
Tangen’s initial plan to put his 43% stake in AKO Capital in a blind trust was deemed insufficient by parliament’s finance committee, jeopardising the appointment and leading some lawmakers to call for Olsen to quit.
Instead, Tangen will now transfer “in perpetuity” his holding and dividend rights to a charitable foundation - the AKO Foundation - and will no longer have any ownership interest in AKO Capital, Norges Bank said.
‘OLSEN OWES ME A BEER’
The foundation says it supports charitable causes that improve education, promote the arts, or mitigate climate problems and that it aims to give away the majority of its wealth to philanthropy.
Finance Minister Jan Tore Sanner, who summoned Olsen to a meeting on Friday and asked him to find a solution, said on Monday he was satisfied with the new arrangements.
The central bank, which runs the wealth fund, is independent of the government.
There was no immediate reaction from the supervisory council watchdog, which had been critical of the earlier arrangement. One opposition lawmaker, who is a member of parliament’s finance committee, welcomed the move.
“From the information we have seen, we see this as a very good answer to parliament’s clear expectations,” Hans Andreas Limi from the Progress Party told Norwegian news agency NTB.
While Tangen had previously ruled out selling his AKO stake, he had also described being CEO of the wealth fund as a dream job. It was not immediately clear how much the stake was worth.
Asked if he was angry about the new plan, Tangen said: “No ... but I think it’s fair to say that Olsen owes me a beer.”
Editing by David Clarke
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