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Key accused of conflict of interest

NZ NewswireNZ Newswire 12/04/2016

Prime Minister John Key has denied in parliament that he has a conflict of interest involving foreign trusts.

Opposition party leaders tried to pin him down on Wednesday with questions about his short-term deposit with Auckland-based Antipodes Trust Group.

The law firm specialises in setting up foreign trusts.

A spokesman for Mr Key explained on Tuesday that the deposit was used to pay for any costs incurred from the prime minister's family trusts, and any surplus funds were invested with New Zealand banks.

The executive director of the law firm is Ken Whitney, who has been Mr Key's private lawyer for some time.

Mr Whitney changed firms last year and the deposit followed him, which is why the links to Antipodes were only detailed in parliament's 2016 pecuniary interests register.

But in parliament Labour leader Andrew Little insisted Mr Key had a conflict of interest.

"How can New Zealanders have any confidence in his judgment as prime minister on tax-dodging foreign trusts when he has links to Antipodes Trust Group, a company specialising in foreign trusts?" he asked.

Mr Key said he wasn't involved in any foreign trusts, but then faced questions from Green Party co-leader James Shaw over the same issue.

"I have never had a foreign trust, I do not have a foreign trust, and therefore I cannot have a conflict of interest with one," Mr Key said.

And Mr Key was again questioned about the appointment of tax expert John Shewan to review New Zealand's foreign trust laws.

Mr Little said Mr Shewan went to the Bahamas in 2014 to advise its government on ways to protect its tax haven status.

"I think he went to talk to them about GST," Mr Key said.

NZ First leader Winston Peters also questioned Mr Shewan's suitability for the role, and was told by Mr Key: "I think his capacity is beyond reproach, and any feeble attempts by that member to denigrate his personality will be seen for what they are - bitter and twisted, but not accurate."

While Mr Key has done nothing wrong, and neither has Antipodes, the timing of the revelation is unfortunate given the spotlight on New Zealand's foreign trust rules amid the fallout from the Panama Papers leak.

Mr Key denies the disclosure was embarrassing.

"I have covered my affairs the entire time I've been prime minister exactly the same way. My lawyer has changed firms, that's the end of the matter," he told reporters.

"It wasn't embarrassing seven years ago and it's not embarrassing today."

However, Mr Key had sought assurances from Mr Whitney that Antipodes is in no way linked to Mossack Fonseca - the Panama law firm at the centre of the global controversy.

"He's been my lawyer for well over 20 years, I don't deal with people unless they're highly ethical and they do things well."

Earlier, Labour leader Andrew Little said Mr Key needs to distance himself from people who are "donkey deep" in foreign trusts.

There are legitimate reasons for having a foreign trust, but they can also be used for tax avoidance and money laundering.

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