New South Wales Trade Minister Stuart Ayres has resigned after an inquiry "raised concerns" about his conduct in the appointment of John Barilaro to a lucrative US trade role.
Mr Ayres has been the deputy leader of the NSW Liberal Party, and also served as the investment, tourism, sport and Western Sydney minister.
Premier Dominic Perrottet revealed Mr Ayres would resign from his portfolios and leadership position in the party, but that he continues to deny any wrongdoing.
He will continue to serve as an MP.
The resignation comes after Mr Perrottet ordered a review into the recruitment of former deputy premier, Mr Barilaro, to the key New York-based role of senior trade and investment commissioner to the Americas.
"Late last night, Minister Stuart Ayres informed me he would resign from his ministerial positions and as deputy leader of the NSW parliamentary Liberal Party," Mr Perrottet said.
"His intention to resign follows a briefing I received from the Department of Premier and Cabinet secretary Michael Coutts-Trotter on a section of the draft Graham Head report relevant to Mr Ayres.
"I subsequently discussed the issues raised in that briefing with Mr Ayres.
"Mr Head's draft findings raised a concern about whether Mr Ayres had complied with the Ministerial Code of Conduct."
Mr Ayres's conduct in the process — which ended in the appointment of Mr Barilaro to the lucrative US trade role — has been under increasing scrutiny in recent days.
Documents released to a parliamentary inquiry investigating the appointment appeared to contradict public statements Mr Ayres made about the recruitment process.
He maintained the process was completed at arm's length from him, and that he had done nothing wrong.
On Monday, Mr Ayres admitted to sending a job ad for the position to Mr Barilaro and later said he would have "discouraged" his former cabinet colleague from applying if he had his time again.
Mr Perrottet on Wednesday said Mr Ayres denies any wrongdoing, but there was "no doubt" the findings in Mr Head's draft report raised questions "in relation to whether or not there has been a breach of the Ministerial Code of Conduct".
Mr Ayres is expected to stay on in parliament, the Premier said.
"When I spoke to him last night, he told me his intention was to remain as the Member for Penrith".
In a statement, Mr Ayres accepted Mr Head's review "creates a question" about whether he breached the code of conduct but said: "In my view, no such breach has occurred."
"However, I agree it is important that this matter is investigated appropriately and support the Premier's decision to do so," he said.
"I have always applied the highest levels of integrity in my conduct as a minister.
"To maintain the integrity of the cabinet, I have decided to resign as a minister to allow the investigation to be completed.
"Accordingly, I will also be resigning as the Deputy Leader of the Liberal Party."
Mr Perrottet said the issues raised by the draft report "go directly to the engagement of Minister Ayres with the department secretary", Amy Brown, during the recruitment process.
He said there was no evidence that Mr Ayres had "lied" about his conduct.
Mr Perrottet defended his handling of the matter, which has dragged on for several days, saying he acted as soon as information came to light.
"What I will not do is make decisions based on media pressure or political pressure," he said.
"I'll make decisions, as I've always done, in relation to what I believe is right."
Ms Brown, the Investment NSW chief executive, was recalled on Wednesday to give evidence again at the parliamentary inquiry into the matter.
Mr Perrottet said he was unaware of what Ms Brown would say, and that — as far as he was concerned — he acted as soon as he received information.
"I have said from the outset the upper house inquiry will do its work," he said.
"My job was to implement an independent review and that's exactly what I have done."
Opposition Leader Chris Minns supported the Premier, claiming there was "clear evidence" Mr Ayres had misled the parliament and public.
Mr Minns said the parliamentary inquiry today heard Mr Barilaro's recruitment was not done at arm's length from Mr Ayres, a claim the ex-minister had repeated "in an insistent way".
"The cover up here is probably worse than the crime," Mr Minns said.
"I think the public would have been furious if there was a job for a mater and it was announced in a transparent way.
"I think they have been taking the public for a ride for the last several weeks."
Labor MLC Daniel Mookhey said the public deserved to know what Mr Ayres had allegedly done, and if the Premier had referred the matter to the Independent Commission Against Corruption.
