Norway's US$1t wealth fund snared by scandal over its CEO

Oslo

THE world's biggest sovereign wealth fund faces serious questions over the conduct of its outgoing chief executive and the selection process of his successor, amid a scandal involving a luxury jet and a private performance by Sting.

CEO Yngve Slyngstad has had to explain why he accepted a flight paid for by Nicolai Tangen, the hedge-fund manager who was eventually tapped to succeed him.

The development has now prompted the Norwegian authorities to look into convening an emergency meeting to examine more closely the circumstances under which Mr Tangen was selected.

The watchdog of Norway's central bank, which oversees the US$1 trillion fund, will try to find out whether the events "represent a breach of regulations applying to Norges Bank's activities", the head of the supervisory council, Julie Brodtkorb, said in a text message on Monday.

The revelations have stunned Norwegians and created the appearance of scandal around one of the country's most revered institutions. Mr Tangen's appointment had already raised questions. To some, his jet-set lifestyle seemed at odds with the spirit of a fund created to safeguard the savings of an entire nation.

He is currently due to take over as CEO in September. Mr Slyngstad announced last October he intended to step down after leading the fund for 12 years, during which time he generated record returns.

At the centre of the affair is a closed conference paid for by Mr Tangen that took place in the US in November.

Besides Mr Slyngstad, the event was attended by several other top-ranking Norwegian public figures. Mr Tangen's subsequent appointment as CEO of Norway's wealth fund was a surprise when it was announced last month, because he never appeared on any official list of candidates. He says he was first contacted by a head-hunting firm in December 2019.

Norges Bank says Mr Slyngstad was not involved in the recruitment process.

Mr Tangen has since told newspaper VG that he planned the seminar back in 2018, before it was known that Mr Slyngstad's job would be up for grabs.

He, the founder of a US$16 billion investment firm called AKO Capital (which has funds registered in the Cayman Islands), contacted Mr Slyngstad by e-mail in January to ask about the job, the business newspaper Dagens Naeringsliv reported on Monday. In the e-mail, he referred to their meeting in November, the newspaper said. Mr Slyngstad never replied.

Mr Slyngstad was invited to the event in an official capacity as a speaker, said Oystein Olsen, the governor of the central bank.

"Slyngstad points out that he should have taken scheduled flights home covered by Norges Bank," he said in an e-mail. "Norges Bank will now review the journey to ensure that it is dealt with in accordance with the bank's ethical rules."

Norges Bank covered the cost of Mr Slyngstad's flight to New York and his train ticket to Pennsylvania to attend the conference at the Wharton Business School.

He then flew back on the plane chartered by Mr Tangen "due to practical considerations", said Norges Bank Investment Management, the unit that manages the fund.

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