Emirates Team NZ have ended a contract after claims spies were caught leaking confidential information and spreading "inaccurate allegations".
The Ministry of Business, Innovation and Employment (MBIE) - the lead agency in staging the 36th America's Cup next year - has confirmed it is investigating claims relating to the organisation of the event.
Team NZ (ETNZ) in an earlier statement on Monday evening said the claims included allegations around structural and financial matters.
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ETNZ bosses said the team and ACE (America's Cup Event Ltd) became suspicious they had informants in the event organisation about six months ago.
They said those suspicions were confirmed when sensitive information recently came back to the organisations from Europe.
"The motives of the informants who had access to the Emirates Team New Zealand base can only be guessed at, at this stage," Team NZ bosses said in the statement.
"In addition, these people have made highly defamatory and inaccurate allegations regarding financial and structural matters against ACE, ETNZ and its personnel."
The team's managing director, Grant Dalton, told Stuff those allegations included who paid to ship his race car to Australia.
The statement said the allegations were entirely incorrect.
"Although these allegations are baseless, MBIE have no choice but to investigate despite our belief that the motives of the informants are extremely suspect. We are working with MBIE to close out the remaining issues with them quickly," ETNZ said.
MBIE general manager tourism Iain Cossar said the organisation and Auckland Council, as co-hosts of the 36th America's Cup, had been made aware of some claims relating to the organisation of the event.
"We are working with America's Cup Events (ACE) Ltd, and Emirates Team New Zealand in relation to the claims made," he said.
"As there are contractual agreements in place, we're unable to go into further detail at this time due to commercial sensitivity, but we will provide a full update once more information is available.
"We are motivated to make AC36 a successful event that highlights the pinnacle of sailing and showcases Auckland and New Zealand to the world."
Dalton told Stuff the team were not sure what secrets had been leaked but the unnamed contractor had access to the Auckland waterfront headquarters. He said he was "flabbergasted" and was struggling to believe such leaks had happened within the organisation.
He said the waterfront base had been swept electronically on two occasions and penetration tests had been performed through firewalls to check people couldn't hack the team, as a result of the suspicions.
The statement said the team would not be deterred by the leaks.
"Emirates Team New Zealand and ACE will not let this set us back in our America's Cup defence or hosting of a great event this summer."