Forestry company sale paid creditors

Maori Development Minister Te Ururoa Flavell.

Maori who should have benefited from a Far North forest were not considered when the cutting rights were sold to a forestry company to pay off creditors, according to a report into a failed Maori trust.

The Advocate has obtained a report into the Kaitaia-based Te Aupouri Maori Trust Board (AMTB) ordered by Maori Development Minister Te Ururoa Flavell, revealing how the organisation came to run up a debt of up to $3 million at the very time it was expected to wind down its operations ahead of Te Aupouri's Treaty Settlement. Among the sorry tales to emerge from the report is that of the Onepu Forest cutting rights.

Onepu is a 436ha forest block near Te Kao which was returned to the tribe following negotiations with AMTB in 2013. A year later AMTB sold the cutting rights to Summit Forestry for $650,000.

AMTB's trustees approved the sale on the basis that the money raised would be used to repay a $190,000 loan to Te Runanga a Nui o Te Aupouri; pay Audit NZ $150,000 for outstanding fees; paint Aupouri House in Kaitaia and carry out other maintenance for $180,000; and use $120,000 to pay the overdraft and have funds available. Despite that, the report stated that money from the sale was used to pay general creditors and meet ongoing costs.

That masked AMTB's true financial position and, because the trustees were not told what the money was used for, they remained unaware of AMTB's dire finances until they had deteriorated even further.

The report's authors found no evidence that the runanga was consulted about the sale; nor did they find any evidence that the people who were supposed to benefit from the forest had been considered.

While it was not clear whether money from the cutting rights had to be paid into the Onepu Fund, set up to benefit Te Aupouri descendants in the Te Kao area, the report said the trustees should have considered how the proceeds could have been spent for the good of the Onepu beneficiaries.

The report found no evidence of fraud or criminal activity.