The company Winnipeg Mayor Sam Katz bought from city CAO Phil Sheegl earlier this year is back in Sheegl's hands.
Although Katz has claimed he did nothing wrong in buying the Arizona-based Duddy Enterprises LLC from Sheegl for $1, the arrangement sparked a great deal of controversy when CBC News first reported about it on Sept. 11.
The transaction of March 29, 2012, did not appear on the mayor's statement of assets and interests that is required to be filed under Manitoba's Municipal Council Conflict of Interest Act.
Katz claimed the city clerk ruled he didn't have to disclose the company transfer because Duddy, based in Scottsdale, Arizona, is a dormant "shell company" that currently transacts no business.
However, a deal between the mayor and the city's top bureaucrat shouldn't be kept from the public record, said critics.
Katz later conceded it could be viewed unfavourably by some and he should have just created and registered his own company and paid the fees to do it.
On Sept. 22, just 11 days after the CBC story broke, Sheegl reaquired Duddy from Katz, according to documents from the Arizona Corporation Commission.
Katz said on Thursday that he sold it back to Sheegl to "get closure" on the issue and clear the air of controversy.
He told reporters that if he had kept the company, "you and others would have kept on writing about it and referring and writing about it so you know what? The issue is dead.
"Who needs this grief and aggravation," he added. "Maybe there'll be less to talk about [and] maybe we can talk about city issues."
But Coun. Jenny Gerbasi said the latest transaction does nothing to restore confidence because the original sale between the two men was inappropriate. The sale back is just as inappropriate, she said.
"You have a CAO of a city, you have the mayor of a city doing business together and a few short weeks after admitting that wasn't a great idea it seems like it's still happening," she said.
If Katz wanted to get rid of the company he should have just divested himself of it and not sold it back to Sheegl, Gerbasi said.
"The fact that he's selling it back to Mr. Sheegl just indicates that there continues to be a blending of these business relationships," she said.