Resigned Synergy chairman Michael Smith says Energy Minister Mike Nahan told him he had offered the job of executive chairman to another WA business person - a conversation that contributed to his decision to quit.
But Dr Nahan said last night this claim was "not true".
Also yesterday, Premier Colin Barnett said Synergy's Act did not allow for an executive chairman to be appointed.
Mr Barnett also took a swipe at the three Synergy directors who quit on July 11, saying he was disappointed they "walked out".
As professional board members, he believed they should have given a month's notice.
It is understood the directors - Eric Hooper, Keith Spence and Margaret Seares - were concerned about "side meetings" between Dr Nahan and two other board members, Mark Chatfield and Michael Goddard, whom he appointed when Synergy and Verve were merged last year.
Dr Nahan said Mr Smith was a "skilled chairman" who did a good job overseeing the merger.
"I called him in a couple of weeks ago and said Mike, you've done a great job, but after eight years and because of the changing structure of the business … I had decided to change the chairman," Dr Nahan said.
"I told him I was considering having an executive chair … He asked me when I was going to make the change and I said well, I'm just discussing it, in the first instance I have no time horizon."
Mr Smith said last night it was more than mere consideration.
"He told me that he had already offered the job to someone else," Mr Smith said. "He told me the name of the person, he told me they had declined.
"I was clearly presented with a fait accompli and an inappropriate process."
Dr Nahan said: "This is not true. I never offered the role of executive chairman to anyone."
He said he abandoned the idea after talks with Mr Smith, but still wanted a full-time chairman to work on "strategic issues" such as a new market structure.