The future of Nicolai Tangen as the next head of Norway’s $1tn oil fund was thrown into doubt on Friday as Norway’s political parties united to insist he cannot take on the role unless he eliminates potential conflicts of interest relating to his ownership of a stake in a hedge fund.
After months of drama, all nine parties laid down two requirements for Mr Tangen to take over on September 1: that he has no investments or holdings that appear to create conflicts of interest that “weaken the trust and reputation” of Norway’s central bank, or that could weaken the oil fund’s work on tax and transparency.
The demands raise questions not just about the future of Mr Tangen, but also Norway’s central bank governor Oystein Olsen, who announced the appointment of the founder of London-based hedge fund AKO Capital as the new head of the world’s largest sovereign wealth fund in March.
Mr Tangen was told by Mr Olsen that he was permitted to keep a 43 per cent stake in AKO. Norwegian politicians on all sides have criticised this decision. There has also been concern because many funds in AKO are based in the Cayman Islands. Norway and the oil fund have worked hard to minimise the use of tax havens.
Observers have suggested there are two possible next steps: either that Mr Tangen resigns, or he sells out of AKO. Mr Tangen declined to comment to the Financial Times on Friday evening.
The executive board of Norway’s central bank and Mr Tangen will meet on Monday afternoon to discuss whether they can find a solution.
Jan Tore Sanner, Norway’s centre-right finance minister who met Mr Olsen on Friday evening, said: “This is a serious matter that could affect the reputation and the trust in Norges Bank. All institutions are dependent on trust and credibility, Norges Bank maybe more than others.”
Government lawyers told Mr Sanner on Friday morning that he could tell Norway’s central bank what to do regarding the appointment of its next chief executive.
The storm around the appointment is the biggest challenge to the oil fund’s reputation in its 24-year history. It has raised concerns about the independence of Norway’s central bank — which houses the fund and appoints its chief executive — as well as potential political interference in the fund.
Politicians on both the left and the right have argued that trust in both the fund and the central bank would be critically weakened if Mr Tangen’s apparent conflicts of interest were not addressed.
“We cannot have an oil fund chief executive who is a walking conflict of interest,” said Kari Elisabeth Kaski of the Socialist Left party.
Mr Olsen said that Mr Tangen retained “a very strong motivation” to take the job but declined to comment on possible solutions other than to say Norges Bank wanted to “contribute” to resolving the affair.
He also noted that Norges Bank and Mr Tangen had already signed an employment contract at the end of May which the central bank had stated “for all practical purposes” eliminated the risk of a conflict of interest. Mr Olsen added that he himself had not considered resigning.
Mr Tangen has said that taking over at the oil fund is a “dream job” even though it will cost him up to NKr70m ($8m) in wealth tax to move back to Norway while his annual salary will only be NKr6.7m. Critics have asked why Mr Tangen does not sell his stake or transfer it to the AKO Foundation, a charitable institution he set up.