Prime Minister Helen Clark will face pressure today to sack David Parker from the Cabinet altogether after his swift resignation last night as Attorney-General for filing false declarations to the Companies Office.
Mr Parker continues to hold the transport, energy and climate change portfolios and deputy Prime Minister Michael Cullen has resumed the role of Attorney-General.
Mr Parker's downfall relates to a condition of the Companies Act that requires all companies to appoint auditors every year, which can be waived if there is a unanimous resolution of shareholders not to audit the accounts.
Mr Parker, a one-third shareholder in the company Queens Park Mews, has for at least five years wrongly ticked "yes" to a question in the annual return asking: "Did the shareholders pass unanimous resolution not to appoint an auditor for the current year?"
Dunedin businessman and shareholder Russell Hyslop had not been a party to such a decision.
Although he and Mr Parker fell out some years ago, his name was not removed from the list of shareholders in the company records, meaning the declaration was false.
The most recent declaration was last year.
The revelations were made in Ian Wishart's Investigate magazine published yesterday morning.
By day's end Mr Parker had resigned as Attorney-General, the Government chief law officer.
National signalled it would press Helen Clark today to justify why Mr Parker should be kept on at all.
Deputy leader Gerry Brownlee said "falsification of documents is very clearly a serious matter".
Filing a false return is an offence punishable by a five-year jail sentence and/or a $200,000 fine.
Helen Clark had to explain why it was suitable for Mr Parker to retain control of transport and energy "when he has publicly confessed to breaking the law".
Asked if the Companies Office should prosecute, Mr Brownlee said: "The question is do we have the protections of company law reinforced ... if prosecutions in cases like this are not brought. "That is the question the Companies Office is going to have to answer."
Act's Rodney Hide said the Companies Office had to investigate "and if the facts stack up to prosecute".
Mr Parker and Helen Clark described Mr Parker's declarations as a "mistake" and Mr Parker said he believed many other people filed such declarations to "cut corners".
By ticking the box, he saved himself $400 or $500 a year in audit fees.
"In respect of my own life I've done a lot more in my life than a lot of people have and overall I am proud of my achievements, but I'm certainly ashamed of this particular mistake," he said last night. With the benefit of hindsight I was a bit glib in the way I ticked the form and sent it in."
Mr Parker considered resigning all his portfolios but thought the mistake had not been "serious enough".
"I didn't feel a need to go further."
Helen Clark said there had been no evidence that anyone had been harmed by "the mistakes" but agreed they justified his resignation. "I don't consider it material to the other portfolios.
"It is material to this one, where you expect an Attorney-General to meet the highest standards."
Mr Parker's resignation will be a blow for the Prime Minister, who when asked about the claims yesterday morning on NewstalkZB replied: "I'm not going to start a public inquiry every time Investigate magazine decides to smear somebody, which is every month on average".
Helen Clark denied the resignation was swift in order to avoid weeks of attacks in the House, such as those sustained by David Benson-Pope.
Mr Parker and Helen Clark alluded to the scrutiny that MPs were increasingly facing.
Helen Clark said a style of politics was emerging in which "every little blemish that is possible on every person's character" was being examined. - additional reporting Ainsley Thomson
I'm ashamed says minister who resigned
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