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Opposition `shot down in flames': Key

NZ NewswireNZ Newswire 2/11/2016

Claims of bribery and corruption by Labour and the Greens over the Saudi sheep deal have been "shot down in flames" by the auditor-general, Prime Minister John Key says.

Opposition criticism has been levelled at Foreign Minister Murray McCully, who made the deal to invest $11.5 million in a desert farm owned by a Saudi Arabian businessman.

Hmood Al Ali Al Khalaf lost millions when the export of live sheep for slaughter was banned in 2007, and his complaints were holding up a free trade agreement with Saudi Arabia and the Gulf states.

The money was used to set up an agrihub with the intention of showcasing New Zealand's expertise and equipment.

Mr Key says Auditor-General Lyn Provost's inquiry report, released on Wednesday, makes it clear opposition claims were incorrect.

"They've been shot down in flames, she's made it quite clear that the claims of bribery and corruption were incorrect," Mr Key told reporters on Thursday.

"Did the government do the right thing in finding a solution? Did it act honourably and above board? The answer to those questions is absolutely yes - Murray McCully has done nothing wrong and has my absolute confidence."

Labour and the Greens are still calling for Mr McCully's resignation, saying although Ms Provost cleared the deal she strongly criticised the way it was done.

Mr McCully on Thursday told parliament he accepted those criticisms and was "taking it on the chin".

He said the free trade negotiations with Saudi Arabia were back on track because of the deal.

"The objection has been removed and the issue of the free trade agreement is back on the rails and will take a proper course," he told parliament.

"This is a very important market for New Zealand producers now, and it is going to be a much more important market in the coming years."

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