Team New Zealand and Ministry of Business Innovation & Employment settle America's Cup dispute

Correction: A report in the New Zealand Herald on December 23 incorrectly stated the Government contributed taxpayer funds towards Team New Zealand for the America's Cup campaign totalling more than $100 million, as well as $40 million to America's Cup Event Ltd to run the international regatta. This is incorrect. The Government is spending $136.5 million on the America's Cup. The Government's total spend includes a host fee of $40 million, which was given in tranches to organisers America's Cup Event Ltd, as well as more than $20 million to infrastructure on Auckland's waterfront. The Government gave Team NZ $5m in 2017 soon after it won the Cup in Bermuda. We apologise for the error.

The Ministry of Business Innovation and Employment has settled its legal dispute with Emirates Team New Zealand over the use of public money for the hosting of the America's Cup.

MBIE announced that it had met ETNZ and America's Cup Events (ACE) today in mediation to resolve the issues.

MBIE said the dispute was over whether the creation of a class rule for the America's Cup was an event cost under the host venue agreement.

"We regret the manner in which this issue has played out in the public arena and the detrimental reputational impact of the process on ETNZ and ACE, its directors and the teams.

"The parties have all agreed that there was reasonable basis for the differing views held to date," a joint statement from the parties said.

"The contractual dispute arose during the course of an independent audit initiated by MBIE as a result of allegations of financial impropriety and misappropriation of funds, which were subsequently investigated and found to be wrong.

"In the course of the mediation regarding the dispute, ETNZ and ACE have provided MBIE with information and independent advice that supports their view.

"MBIE, ETNZ and ACE have now agreed that there was a reasonable and legitimate basis for ETNZ and ACE to consider that the class rule costs were within the scope of event costs in the host venue agreement."

The dispute became public on July 1, when the Herald revealed the Government was investigating 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 the Herald's owners NZME from revealing details of what the court found to be an interim report by forensic accountancy firm 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.

Dalton consistently 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."

Dalton said there was never 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".