Why NZ’s top official is investigating a major fraud scandal

New Zealand’s chief executive has been investigating allegations of serious misconduct in his official office, including the awarding of a $10m salary to a friend and his staff, a senior executive has told a parliamentary inquiry.

The Financial Conduct Authority (FCA) is now investigating allegations the Chief Executive of New Zealand, Michael Woodcock, abused his position by awarding a salary to the wife of a New Zealand Water company executive to secure a lucrative new contract.

Woodcock, a former Cabinet minister, was appointed chief executive of New South Wales Water in November.

He is also being investigated by the FCA, after his wife was involved in a $20m bribery scheme in 2016 involving the purchase of water by a company she had close connections with.

In an interview with the inquiry into fraud and corruption in public office, Woodcock said he had learned about the investigation on Monday and would have to wait for a decision by the watchdog.

“I’m waiting for a final decision.

I will make the decision as soon as I get a final call,” he said.

Asked whether he would recommend to the board that he step down, Woodruff said, “I will certainly make the call if it is a unanimous recommendation”.

“What I will be trying to do is take every opportunity to show what I have done to the people that have supported me over the years.”

Woodcock is the highest-profile public figure to face inquiry.

Former prime minister John Key has also been investigated.

According to the FCA’s website, Woodcrafts office has been scrutinised by the regulator since 2013, when it was alleged he had a personal relationship with a former minister.

This involved gifts from a former New Zealand Government employee, a New South Welsh executive, a Water NZ executive and a business partner.

An inquiry was set up after the FACA learned that the former minister had been a “client of a third party”.

In a statement on Monday, Woodcocks office said it was “committed to taking all steps necessary to ensure that the information is appropriately presented to the inquiry and the relevant inquiries”.

Woodcocks was named chief executive in November 2016 after his appointment as Chief Executive Officer of New York’s Metropolitan Water District, after being appointed as chief executive for New Zealand Waters.

It was then reported he had accepted an offer of $10 million from New Zealand to buy water from the company.

Under a deal made with the company, the water was sold for $12.5 million to the US company, which has since shut down.

A year later, Woodcox was appointed as the chief executive officer of the New Zealand Defence Force, which oversees the Royal New Zealand Air Force, after the former defence minister was forced to step down due to the allegations.

His office was later found to have breached the Foreign Agents Registration Act when it approved a $4m salary for Woodcock to attend a New York fundraiser.

New Zealand Water was also involved in an alleged bribery scheme involving the sale of water to a company the New York businessman had close ties with.