Maori group in wrangle over selloff

An organisation which represents $6 billion worth of assets could be in the process of selling a subsidiary headed by a power player in Maoridom.

The organisation, the Federation of Maori Authorities, is in discussions to sell Fomana Capital to Paul Morgan, who is a FoMA board member and the managing shareholding director of the subsidiary.

There has long been unease about the corporate set-up, with concerns that any FoMA subsidiary should be solely owned by the federation with benefits accruing only to itself.

The Listener magazine named Mr Morgan as Maoridom's No 1 on its "power list" in 2008 but this year Fomana Capital, along with Te Puni Kokiri, the Maori trustee John Paki, and the Poutama Trust have been criticised for the way Tekau Plus - a project to get 10 Maori businesses earning $10 million in export earnings - was run.

Fomana Capital was the "project manager" for Tekau Plus, which, an independent government review found, had "poor management of actual and perceived conflicts of interest".

Sources told the Herald that FoMA is in the delicate process of selling the subsidiary to Mr Morgan and another minority shareholder, Wayne Mulligan.

The situation is sensitive because Mr Morgan, a former leader of FoMA, has lived and breathed the federation's work for the past two decades.

Board member Materoa Dodd said nothing had been "signed yet" and discussions were ongoing. A majority voted for the sale but she had questions about it because members hadn't yet had a chance to mandate. She was also concerned that the name Fomana was "indivisible" from the parent organisation.

Chairwoman Traci Houpapa refused to confirm sale negotiations were ongoing.

"The situation provides the opportunity for FoMA to consider its strategic direction, functions and purpose."

She did, however, say it was a "fair comment" that members were entitled to best-practice corporate governance.

Mr Morgan did not return Herald inquiries about the sale process, however, in an earlier interview he said he never saw any conflict in being both a board member and a shareholder of its subsidiary.