Secret reports hint at cash trouble for tribal trust

By JON STOKES

A Northland Maori subtribe is being urged to make public legal and financial reports into the fate of its $15.6 million Treaty of Waitangi settlement

A senior member of the hapu trust has called for the release of two "damning" reports to "let hapu members know the sorry state of the group's financial affairs".

He has also called for the trust's former chairman, Sir Graham Latimer, to stand down from the trust until an audit is completed. The reports into the handling of Kaipara-based hapu Te Uri O Hau's treaty settlement were commissioned from lawyers Lowndes Associates and accountants the Gibson Group at a cost of $110,000.

When completed in February they were to be made available to all beneficiaries.

This has not happened and attempts by the Herald to publish details of the reports have prompted threats of legal action by lawyers acting for the trust.

Trust deputy chairman Wayne Smith, who has read the reports, said: "The reports were commissioned to inform our people. This has not happened."

A hui was to be held in March to inform hapu members but it had not taken place.

Mr Smith has called for a full audit of Te Uri O Hau company accounts, a freeze on some transactions, and for Sir Graham to stand down until the audit is complete.

"Our cash holding is down from what it was at the time of the settlement in 2002. I want to know where that money has been spent.

"This year we are set to write off more. I am on the board yet do not know where the money has been spent, nor have I approved its expenditure."

He said he was forced to go public with his concerns after moves to get further financial information about the trust's activities were met with demands he sign a confidentiality agreement - preventing him from reporting back to beneficiaries.

"I was elected on to the trust by my marae. They are trying to gag me from speaking to our people."

Mr Smith has also called for the repayment of "recognition payments" made last year to Sir Graham, and has questioned the legality of his employment contract as commercial and political director, signed on Christmas Eve last year.

That was in addition to a chairman's honorarium, and included a monthly allowance for travel, office overheads and vehicle lease.

He also wants new trust chairman Russell Kemp's chief executive employment contract, signed last November, to be scrutinised and if deemed illegal to be voided and money paid returned.

He said he believed the trust deed was quite explicit: trustees could not be employees of the trust, and there was no power to make "recognition payments". He said he was concerned with the large number of transactions by an interim board last year, including creating companies, signing employment contracts, and entering into significant transactions.

Sir Graham described Mr Smith's criticism of the trust's activities as sour grapes.

He said a recent audit cleared the trust of any wrongdoing, and details would be provided at the trust's annual meeting in two weeks.

"It might look bad, but don't forget the family members associated with the claim went without. There's nothing I am ashamed of. In most cases somebody doing the job that we've done would require a finder's fee of $500,000 or more. We didn't ask for that.

"Somebody had to underwrite everything. Really I don't want to talk about it. If he wants to cry to you and you want to run the story, you run the story."

However, hours after speaking with Sir Graham, Lowndes Associates, acting on behalf of trustees, contacted the Herald to have the story stopped.

"Both reports are confidential. This is made clear on the face of the reports. In any event, we now put you on notice that confidentiality is asserted and, as the recipient of confidential information, the Herald is under duty to respect this confidence."

Sir Graham said many of the recommendations made in the report had been followed.

"Everything we have done has been checked by our lawyers and accountants."

He said he had no intention of repaying money for recognition payments. "I am not too worried what he [Mr Smith] has to say."