The Auckland Council was forced to address concerns that a Rugby World Cup consultant was able to access commercially sensitive information of rival security firms while setting up his own company.
Aaron Colthurst was contracted as the security contracts manager for Auckland Tourism, Events and Economic Development (Ateed), a council-controlled organisation, which was responsible for security across the city for the tournament.
He was in charge of organising six security firms during the six-month contract, and had access to their price structures, training schedules and standard operating procedures.
Mr Colthurst's contract ended in December, just before he incorporated his own security company called Platform 4 Group Ltd.
Later that month, the new firm was awarded the Ateed security contract for the Lantern Festival in February.
An Ateed spokeswoman said senior staff did not receive any official complaints from security firms about Mr Colthurst's consultant role.
"Senior management was not aware, even at the conclusion of Mr Colthurst's contract, that he was setting up a security business."
Rival security firms laid complaints with Auckland Council in January.
"Since then [Auckland Council] has been working with Ateed senior management to ensure that a robust and independent process is undertaken to assess the concerns raised," the spokeswoman said.
Mr Colthurst did not respond to a request for comment.
A separate investigation into a complaint of potential misuse of that confidential information found no evidence of a breach.
"Former service providers to Ateed cannot be prevented from establishing businesses to compete against others in the market provided it is done lawfully and without use of confidential information," the spokeswoman said.
The Herald last week revealed the Department of Internal Affairs is investigating Platform 4 Group for allegedly operating as an unlicensed security provider at Eden Park, Vector Arena and the Lantern Festival.
Under a new law, security firms must be licensed to do any work including crowd control.
An application to license Mr Colthurst's company was made in December but was not completed at the time the contracts were awarded.
When Eden Park, Vector Arena and the council were told the new provider was unlicensed, Platform 4 Group teamed up with a licensed company, Harrison Tew Consultants, to take over the contract.
Harrison Tew - staffed by two directors to provide emergency planning for schools but with no crowd-control experience - then employed Platform 4 casual staff and independent contractors to provide security at events, according to a complaint laid by Darien Rush Security.
A spokesman for the Ministry of Justice, which administers the Security Licensing Authority, confirmed the matter was referred to the newly formed complaints, investigations and prosecutions unit at the Department of Internal Affairs. A departmental spokesman would only confirm that an investigation was under way.
Several figures in the security industry have been interviewed by a senior investigator and the Platform 4 licence application is on hold for now.