A probe into the funding of Team New Zealand and the America's Cup has been released and found "no evidence of financial impropriety or misappropriation of funds".
But a $3 million contribution to Team NZ by America's Cup Limited (ACE) will go to mediation with the Ministry of Business, Innovation and Employment (MBIE)
MBIE, in consultation with host partner Auckland Council, has completed its audit into allegations made against Emirates Team New Zealand Limited (ETNZ) and America's Cup Event Limited (ACE).
The Beattie Varley report, commissioned as part of the audit, found that there was no evidence of financial impropriety or misappropriation of funds.
The report also found:
• There was no loan from ACE to ETNZ,
• There was no fraud by ACE or ETNZ,
• That no personal expenses of TNZ boss Grant Dalton or any other personnel were paid from Crown monies,
• That there has been no financial impropriety of any nature.
The Herald revealed in July that Team New Zealand and America's Cup organisers were at the centre of an inquiry commissioned by the Crown over the spending of public money, including allegations of a "reclassified" $3 million loan and claims of fraud involving a Hungarian bank account.
Dalton at the time admitted the syndicate had been scammed but denied there had been any $3 million loan to Team NZ.
"It was important to work through the audit process, and confirm that there was no financial impropriety or misappropriation of funds," MBIE chief executive Carolyn Tremain said today.
Tremain said that the issue with the "third party fraud that Team NZ had been victim of" has been "satisfactorily resolved" from MBIE's perspective and that the Government agency was satisfied that any loss as a result of this scam won't be paid for by any Crown investment.
The Beattie Varley report said that a contractual disagreement was outstanding, regarding whether certain cost that should be borne by the event, and therefore, ultimately, by Crown investment. The parties are going to mediation on this issue.
"There is no wrongdoing in this regard and the processes for resolving contractual disagreements is well established and we look forward to continuing to work constructively together on this matter," Tremain said.
Dalton said: "With the departure of the previous event managers, we have undertaken a thorough review of our personnel and we have the team to deliver on the event. We have engaged experienced and respected senior event professionals to lead the Event preparations."
Tremain said it was in the interest of all that the parties "work together to deliver a successful event".
"The Crown is satisfied to reinstate investment and once the appropriate contractual deliverables have been met, the next payment under the HVA [host venue agreement] can be made."
"The America's Cup is an important event for Auckland and for New Zealand, and even more so as we work through and recover from the impacts of Covid-19."
Auckland mayor Phil Goff said: "While there are still areas of disagreement between the host and Emirates Team NZ in terms of the nature it's being organised, the serious allegations that would have done damage to the event has now been found not to have substance and that's a good thing."
He said because of Covid-19 and the border control, it wouldn't be the event we had hoped in terms of bringing so many people to the country in terms of the superyachts and tourists but it would still be a world-class event.
When asked if the High Court injunction, preventing media from publishing a interim report by Beattie Varley, should be lifted now that conclusions had been made, Goff said that was up to Team New Zealand.
Sir Stephen Tindall, Chairman of Team New Zealand, said: "We are pleased to have this behind us and ACE can now focus on putting on a great spectacle, and ETNZ on keeping the Cup in New Zealand."
A confidential June 22 letter written by MBIE and the Auckland Council - and obtained by the Herald - revealed allegations around the handling of public money; the operation of the Cup itself and worries about public safety. It also revealed officials' concerns that ACE and Team NZ were in breach of obligations.
The letter - written by Tremain and Auckland Council chief executive Stephen Town, and sent to ACE and Team NZ - outlined "serious matters" raised by a financial investigation firm commissioned by the Crown to look into the financial management of next year's America's Cup in Auckland.
The revelations followed denials by Team NZ of any impropriety following allegations made by former contractors who were now acting as informants. Dalton had described the allegations then as baseless.
Dalton said last month the sailing syndicate looked forward to "knocking off" the allegations one by one, saying no public money had been misused.