Government probe into America's Cup funding coming to a head

Team New Zealand boss Grant Dalton claims the team was the victim of a "deliberate, sinister, and highly orchestrated attack". Picture / Ricardo Pinto

A probe into the finances of the organisers of next year's America's Cup is set to come to a head, with the final report by forensic accountants due to be submitted to the Government this week.

At the start of July, the Ministry of Business, Innovation and Employment (MBIE) announced it was suspending payments to America's Cup Event (ACE) - the organising company that is part of Team New Zealand - while claims about the spending at the two organisations were examined. The final report by forensic accountancy firm Beattie Varley, is expected to be submitted to the Government as soon as tomorrow. MBIE general manager of tourism Iain Cossar said the probe would be completed soon. The ministry has refused to say what steps it might take.

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"Beattie Varley's report is due to MBIE shortly, after which we will consider the findings. We expect the process to be completed by the end of August."

The Government has agreed to provide $136.5 million toward's next year's America's Cup, including a host fee of $40m.

Before the probe was revealed, MBIE had provided $29m to ACE.

On July 1, the Herald revealed the Government was undertaking a probe into Team New Zealand and ACE over the spending of public money, including allegations of a "reclassified" $3m loan and claims of fraud involving a Hungarian bank account.

A day later MBIE confirmed it was freezing funding, shortly before Team New Zealand was granted a High Court injunction preventing NZME from revealing details of what the court found to be an interim report by Beattie Varley.

The move followed days of headlines, kicked off by Emirates Team New Zealand boss Grant Dalton claiming the syndicate had identified and expelled "spies" from within the team.

Dalton made the claims days after MBIE chief executive Carolyn Tremain and then Auckland Council chief executive Stephen Town wrote to ACE outlining concerns about the ability of the event organiser to run a "safe and successful" event and about the way funding had been used.

In the following days Dalton denied any wrongdoing.

"Categorically, absolutely no. I guess that's one of the disappointing things about all this, because allegations are easy to make - they're often harder to defend."

He denied there was ever a loan between ACE and Team New Zealand and said the fraud was related to the team being the victim of a scam.

After winning the injunction against the Herald, Dalton released a statement claiming the team was the victim of a "deliberate, sinister, and highly orchestrated attack".

Dalton did not respond to a request for comment on Friday.

Gib Beattie, the former Serious Fraud Office official who co-founded Beattie Varley, declined to comment.

Phil Twyford, the Cabinet Minister responsible for the America's Cup has declined to comment on the investigation while it is under way. He earlier confirmed he was first made aware of fraud allegations in March.