Colin Espiner

National Party leader John Key has admitted the involvement of frontbench MP Gerry Brownlee in a casino consultancy was "inappropriate" and a wake-up call for his caucus.

The Ilam MP has resigned as a director of New Zealand Casino Services, just a month after agreeing to go on the fledgling company's board.  The company, set up to advise casinos throughout New Zealand, is headed by Stephen Lyttelton and Peter Arbuckle, both former senior executives at the Christchurch Casino.

The pair resigned from the casino last month, alleging a series of problems that are now the subject of an inquiry by the Department of Internal Affairs (DIA).  Inquiries by The Press have revealed that the company's other director is another senior member of the National Party, wealthy Auckland businessman Peter Goodfellow.

Goodfellow, a former chairman of the Auckland Young Nationals, was re-elected to National's governing board of directors last year.  He is also a director of a host of prominent companies, including Sanfords, Cambridge Clothing and some finance companies.  The Press understands that New Zealand Casino Services is applying for a gaming licence.

Brownlee told The Press yesterday that he was embarrassed about his involvement and had joined the board of the company only as a favour to Lyttelton, who was a friend.

"I did it mainly as a favour to a friend," Brownlee said. "That is not very smart.  He initially talked about a company that would be an advisory-consultancy service to casino operators in New Zealand, and I thought, `Well, that's perfectly reasonable. There's nothing inappropriate about that'," Brownlee said.  But then as the various allegations came out, I started to get concerned about what sort of position I was in because the DIA is investigating Christchurch Casino and I needed to be in a position where I could respond to those things."

Brownlee said that once he had realised he had "got myself in the wrong space" he tendered his resignation.  "I'm taking a bit of a battering, with people saying, `What the hell are you involved for?' Those are all fair questions – far worse after the DIA report if I started making comments."  Brownlee said his involvement and that of Goodfellow was nothing to do with the National Party. "I'd be absolutely gutted if there was any view if this was a National Party deal. Absolutely not," he said.

Key said the saga had been "a worthy reminder for our caucus" about how careful MPs needed to be when managing their private commercial interests and their public roles.  Key said he had not told Brownlee to quit the directorship but believed he had made the right decision. "Obviously, he believes he's got himself in a slightly compromised position and I think he's taken the entirely appropriate course of action in resigning from the company."

Key said he was careful with his private sector interests.  "I have got rid of most of my New Zealand interests because I don't want a conflict and what interests I do have are blind-managed."  The Goodfellow situation was different, Key said. While Brownlee was a public figure, Goodfellow was a private individual "who happens to be a National Party director".

Internal Affairs Minister Rick Barker said yesterday that he hoped to have a report on allegations against the Christchurch Casino from the DIA next Friday. He expected to announce any decisions stemming from the report the following week.

Barker said he thought Brownlee was wise to have resigned his directorship.  "There is an inquiry currently being undertaken into the (casino) allegations and it is critical for the independence of the inquiry that it is not influenced by those involved in the political process," he said.

The country's largest clothing manufacturer says it remains committed to Christchurch, despite the sale of a major asset to an Australian company. LWR Industries yesterday reaffirmed its intention to stay in the city, concentrating on its successful Canterbury International range of clothing.

"I think the prospects are good," LWR executive director Peter Nicholas told The Press. "We are utterly committed to making it here, and we'll do anything we can to stay. It's part of the company's heritage."

The clothing industry has been battered by a raft of redundancies and closures, most recently Bendon's decision to relocate overseas. LWR, which once employed thousands in Christchurch, now employs 280 people in the city and was sold last year to a consortium led by New Zealand-born American David Teece.

The Commerce Commission has cleared the way for LWR to sell most of its hosiery and underwear business -- marketed as Jockey -- to Pacific Dunlop, although an agreement has been struck to keep at least 75 per cent of the manufacturing of the product in Christchurch for three years. The sale has raised fears that the city will lose its valuable role as a centre of clothing manufacture, placing jobs and exports at risk. Mr Nicholas said the jobs of the 77 people employed making Jockey garments were safe, although Pacific Dunlop had the option to look elsewhere for the manufacture of Jockey after the three-year clause expired.

Mr Nicholas said LWR would pump the proceeds from the sale -- believed to have topped $16 million -- into growing its Canterbury brand and retiring debt.

Although Asia was gaining prominence as a centre of clothing manufacture, New Zealand also had the advantages of quick turn-around, high-quality garments, a low dollar, and lower wage costs than Australia or Europe. LWR last year won the contract to make the Australian Wallaby rugby jersey.

It clothes the national teams of Scotland, Fiji, Tonga, Canada, Namibia, and Italy, plus a host of international provincial teams. It lost the All Black contract, however, which went to American company adidas. LWR also announced it will centralise its sourcing and buying operations in Christchurch. LWR's operations in Australia, South Africa, and Asia make their own decisions. Mr Nicholas said he hoped the centralisation would lead to more manufacturing being done in Christchurch rather than overseas.

Jockey New Zealand general manager Bryan Pearson said four or five management positions were at risk in Palmerston North. However, he hoped the Christchurch plant could expand. The challenge was to find new markets for New Zealand-made goods.

Pacific Dunlop was the best company the operation could have been sold to as it knew the industry and already held the Australian Jockey franchise, he said.

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CAPTION: PHOTO: RACHEL SIMPSON LWR executive director Peter Nicholas on the shop floor
at the Montreal Street factory.