KI Mayor Michael Pengilly drawn deeper into Smith Bay port controversy

A 2019 letter has drawn Kangaroo Island Mayor Michael Pengilly deeper into the deepwater port controversy – but he says it’s a “load of rubbish”.

Kangaroo Island Mayor Michael Pengilly is facing calls to step down over allegations he had a perceived conflict of interest when voting against plans to build a deepwater port at Smith Bay.

The mayor has rubbished the claims, which were made in a never-before-seen 2019 letter sent by a former KI councillor and shareholder of the company behind the $40m Smith Bay plan.

A parliamentary committee is investigating whether Attorney-General Vickie Chapman had a conflict of interest and breached the ministerial code of conduct in rejecting Kangaroo Island Plantation Timbers’ application to construct a $40m deepwater port at Smith Bay.

Parliament is investigating whether Attorney-General Vickie Chapman had a conflict of interest and breached the ministerial code of conduct in rejecting the Smith Bay port. Picture: Keryn Stevens

Ms Chapman has denied any conflict of interest and previously described the inquiry as a “witch hunt”.

Mr Pengilly refused to answer questions and sensationally hung up on the inquiry on Friday.

That day, a 2019 letter, written by Sharon Kauppila and her building business partner Luke Kauppila, was submitted to the committee but not made public.

Addressed to senior planning bureaucrat Robert Kleeman, the pair, who declared they were KIPT shareholders, accused Mr Pengilly of “using his position … to prejudice those who do not agree with his position”.

KI Mayor Michael Pengilly has denied conflict of interest claims made in a 2019 letter. Picture: Brad Fleet

“The Mayor lives within 2km of Smith Bay and has a demonstrated bias and a perceived conflict of interest,” the letter said.

The letter was sent on May 27, 2019, two weeks after the council rejected Smith Bay as the location for the port.

Mr Pengilly labelled the letter “a load of rubbish” and “totally erroneous”.

“If I’ve had to make some sort of declaration of conflict of interest or perceived conflict of interest, I have,” he told The Advertiser on Sunday.

“Everybody on Kangaroo Island knows where I live – there’s a bloody great sign on the gate that says MR and JM Pengilly.”

SA-BEST MP Frank Pangallo called for Mr Pengilly to step down and an independent investigation into his involvement to be launched.

Mr Pangallo called the letter “damning”, with its claims of Mr Pengilly’s “power and influence over other councillors, as well as his personal conflicts of interest with the port project”.

Originally published as KI Mayor Michael Pengilly drawn deeper into Smith Bay port controversy