KEY POINTS:
The Commerce Commission is to investigate its own deputy chairman over disclosure issues relating to finance and investment companies just six weeks after he was appointed to the post.
Donal Curtin has been on the commission's board since 2001 and was promoted at the end of July by
commerce minister Lianne Dalziel for a five-year term.
At the time, industry commentators expressed surprise because Curtin was until just a few weeks earlier chairman of troubled financial advisory group Vestar's investment committee.
That investment committee is facing possible legal action from a group of at least 45 investors for giving them poor advice and ploughing millions into finance companies which have since hit trouble.
Many were put into the same six finance companies - Bridgecorp, Capital+ Merchant, OPI Pacific Finance, MFS Boston, St Laurence and Property Finance.
Only Property Finance is not in receivership or moratorium.
OPI Pacific Finance and MFS Boston were owned by the same company that owned Vestar.
Up to $250 million of the $1 billion investors had with the company is thought to be at risk.
The Vestar case is likely to include alleged breaches of the Fair Trading Act, which is monitored by the Commerce Commission. It is also in the process of investigating several finance companies.
Yesterday the commission said it would be inquiring into whether Curtin had provided an appropriate level of disclosure to the commission and the minister in relation to his involvement with Vestar, its parent company MFS and unrelated investment company Mint Asset Management.
"The commission has appointed Hugh Rennie, QC, to conduct the inquiry. Mr Rennie will investigate the facts surrounding the issue of disclosure. Mr Rennie will then advise the commission what action, if any, will be appropriate for the commission to take," it said.
All members of the commission are required to provide full disclosure of any potential interests under the commission's conflicts of interest policy where they must "be alert to and disclose all actual or perceived conflicts of interest as defined by the Crown Entities Act 2004".
The commission said Curtin had voluntarily stood down as a member during the inquiry.
Curtin is a well-known economist and is also an investment adviser to Kiwibank and chairman of the Public Trust. He runs his own consultancy business and was formerly chief economist with the BNZ Bank.
A woman spoken to yesterday at Curtin's home address said he was not available to talk.
