CEO of Norway's sovereign wealth fund faces probe after luxury jet use

Yngve Slyngstad speaks during an interview in Oslo, Norway, on June 2, 2017.
Yngve Slyngstad speaks during an interview in Oslo, Norway, on June 2, 2017.PHOTO: REUTERS

OSLO (BLOOMBERG) - The outgoing chief executive of Norway's sovereign wealth fund, the world's biggest, faces a probe in his home country after accepting a trip that may have strayed from the fund's compliance rules.

Norges Bank, which oversees the almost US$1 trillion (S$1.42 trillion) investment vehicle, will investigate whether a flight taken last year by CEO Yngve Slyngstad was appropriate, it said on Sunday (April 19).

Mr Slyngstad, who announced his decision to step back as head of the fund in October after winning accolades for his performance over the past 12 years, accepted the travel offer on a chartered luxury Boeing 777 from Mr Nicolai Tangen. The 53-year-old hedge fund manager and founder of AKO Capital is due to replace Mr Slyngstad as the Norwegian wealth fund's CEO later this year.

The development adds to questions about the fund's choice of Mr Tangen as CEO as he faces criticism in Norwegian media for what is perceived as a jet-set lifestyle that's unsuited to the guardian of an entire nation's savings. It also raises concerns about the selection process that resulted in Mr Tangen becoming the fund's next CEO, though the fund says that Mr Slyngstad wasn't involved in the decision.

"Yngve Slyngstad has stated that he was invited as part of the bank's operations," Mr Oystein Olsen, the governor of the central bank and chairman of the fund's executive board, said in an emailed statement on Sunday. "Slyngstad points out that he should have taken scheduled flights home covered by Norges Bank. Norges Bank will now review the journey to ensure that it is dealt with in accordance with the bank's ethical rules."

The trip, which was first reported by Norwegian newspaper VG, was arranged as part of Mr Slyngstad's regular work attending conferences around the world. Mr Tangen had invited Mr Slyngstad to participate in the event, which took place last November. The conference had the title "Back to University" and was held at the Wharton Business School. Mr Slyngstad participated in a panel called "What Type of Economic System Do We Need to Prosper in the Next Decade and Beyond," according to the fund.

"Norges Bank covered the cost for Yngve Slyngstad's flight to New York, as well as the train ticket to Pennsylvania," the fund said in a written response to questions. AKO Capital, which is the investment firm owned by Mr Tangen, "is not a business connection. When we at Norges Bank arrange our own seminars, it is our custom to cover the food and hotel costs for speakers. When we ourselves are speakers, the custom is that we participate in meals that are linked to the event and those costs are usually paid by the arranger. In certain situations, the conference arranger also pays the hotel, if one is listed as a speaker. Yngve Slyngstad flew back, due to practical considerations, with a chartered flight from Pennsylvania to Oslo. This cost was covered by Tangen."

The event included a private performance by Sting, at a cost of US$1 million, which was also paid for by Mr Tangen, according to VG.

The fund says Mr Slyngstad wasn't involved in the process of selecting his successor. That decision was left to the central bank. "Slyngstad was in no way part of the recruitment process," the fund said.

 

Another passenger on the flight paid for by Mr Tangen was his long-time friend, Attorney-General Fredrik Sejersted. The office of Prime Minister Erna Solberg said on Sunday that Mr Sejersted would no longer be called on to advise in matters concerning Mr Tangen, given the ties between the two.

Opposition parties, including the country's biggest, Labor, asked the government to look into potential improprieties, VG reported on Sunday. Minister of Labor and Social Affairs Torbjorn Roe Isaksen, then in charge of trade and industry, also participated in the event, though the government paid for his travel and accommodation.

For Mr Slyngstad, such events are normal and part of the job of the CEO of the wealth fund, it said.

"Slyngstad has wide-ranging contact with other funds and investors," the fund said. "Nicolai Tangen is, as the head of AKO Capital, one of the people with whom it is natural for Slyngstad to be in contact with. The contact between Tangen and Slyngstad has been based on their professional roles as leaders of their respective organisations."

Mr Tangen, who has also come under fire in local newspapers for his company's decision to use tax havens, recently had to amend some of his earlier remarks on inheritance taxes after colliding with the fund's requirement that its CEO refrain from making political statements. He's due to start as CEO at the wealth fund in September.