In July, Mr Massy-Greene was appointed chairman of Networks NSW, which will manage the state-owned electricity networks, Ausgrid, Endeavour Energy and Essential Energy, when they are merged into a single entity.

No executive search was undertaken before the appointment, which was confirmed by Mr Baird in a press release on July 2.

At a budget estimates hearing at State Parliament today, opposition MPs revealed that Mr Massy-Greene's company, Eureka Capital Partners, has donated $15,000 to Mr Baird's election campaigns.

According to NSW Election Funding Authority records, Eureka Capital Partners donated $10,000 to Mr Baird in March 2007 and $5000 in March last year, shortly before the state election.

As chairman of Networks NSW, Mr Massy-Greene reports directly to Mr Baird and the Finance and Services Minister, Greg Pearce.

The Treasurer told the hearing he had known Mr Massy-Greene "through the years as someone ... through business".

Challenged by Labor MPs about whether the appointment was appropriate, given the donations, Mr Baird insisted it was made by the Premier, Barry O'Farrell.

"It's a Premier's decision, he made the decision," Mr Baird said. "We are appointing people on the basis of their merits."

The Labor MLC, Walt Secord, responded: "They just happen to be mates who donated to your re-election."

Mr Baird shot back: "Have you looked at [his] CV?"

Mr Baird was asked on numerous occasions by Mr Secord and another Labor MLC, Greg Donnelly, if as a shareholding minister he recommended Mr Massy-Greene's appointment.

Under the State Owned Corporations Act, board appointments are made by the governor "on the recommendation of the voting shareholders".

Mr Baird repeatedly declined to say if he recommended Mr Massy-Greene.

"I didn't approach him. It was an appointment made by the Premier."

Earlier, asked when he first learnt Mr Massy-Greene would be given the job, Mr Baird said: "I don't know the exact time."

Liberal MLC Catherine Cusack pointed out that Mr Massy-Greene's company has also donated to Labor.

Mr Donnelly accused Mr Baird of being in breach of the ministerial code of conduct by not declaring a conflict of interest in the appointment process, but Mr Baird denied this.

Mr Baird accused Labor of running a "smear campaign" that was "going nowhere".

Mr Massy-Greene is chairman of Eureka Capital Partners, a company focused on financing and development in the minerals and energy sectors.

He is vice-president of the council of Cranbrook School and chairman of the Salvation Army's Red Shield Appeal Committee.

He has donated to other Liberal MPs, including Malcolm Turnbull and the Vaucluse MP, Gabrielle Upton.

The shadow treasurer, Michael Daley, said it was "a clear case of jobs for the boys and the people of NSW deserve and were promised better from Barry O'Farrell".

Comment is being sought from Mr O'Farrell and Mr Massy-Greene.