Publisher hits back at claims

The firm had been given until January 5 to respond to this draft report but was requesting more time because of the holiday break.

Trends says it met criteria for the government grant it received.

An Auckland publishing company that got $330,000 of taxpayer money is complaining it was treated unfairly after its funding was suspended and the Serious Fraud Office contacted.

The Government's research and development body, Callaghan Innovation, on Wednesday announced it had suspended a growth grant for Trends Publishing International, a company based in Ellerslie associated with Trends magazine.

The Crown organisation, which is in charge of research and development funding, said it had concerns about the "legitimacy of some of Trends' claims" around the funding, which was approved in March.

The SFO also confirmed this week it was considering a referral about the company it received from Callaghan.

While initially unavailable, Trends chairman David Johnson has since castigated Callaghan this week for how it handled the situation.

Johnson "absolutely" denied Callaghan's allegations and said Trends met the criteria for the grant.

"We followed strenuously the conditions of the contract through the process, as far as we're concerned, to the letter of the law," Johnson said.

Johnson said he was yet to even receive a full copy of the draft report Callaghan produced after it audited the publishing company.

The firm had been given until January 5 to respond to this draft report but was requesting more time because of the holiday break.

"These are important answers to be given back [to Callaghan] and technically there's no real working days because mostly people are away at Christmas parties now and of course on holiday ... we think it's grossly unfair actually," he said.

Johnson said the same of Callaghan announcing it had alerted the Serious Fraud Office and complained of the effect it would have on his personal reputation and the company's brand.

"Imagine it was you in this position - it's just horrendous," Trends' chairman said.

Responding to some of Johnson's complaints, Callaghan Innovation acting chief executive Sarah Holden said the situation required "timely action".

"We take very seriously our duty to responsibly manage government R&D funding on behalf of the New Zealand taxpayer. The nature of our concerns over the legitimacy of Trends' funding claims requires full transparency and timely action," Holden told the Herald.

"We have given Trends a reasonable amount of time to provide a response. Upon receipt of information that has been sought from Trends for some time, we will be considering our response in determining the next steps regarding its Growth Grant contract," she said.

The type of grant Trends Publishing International received from Callaghan was non-discretionary, which meant if a company met the relevant criteria it was eligible for the funding.

While some may see it as unusual that a publishing company was receiving a grant, Johnson said Trends was working on something in the "tech field" which he could not reveal.