Serious allegations of fraud at Team New Zealand have emerged, with claims public money was mishandled.
Auckland Council and the Ministry of Business, Innovation, and Employment (MBIE) are alleging a $3 million loan given to Team New Zealand has been reclassified and linked to a Hungarian bank account, according to a letter seen by NZME.
The letter reportedly says Team New Zealand and America's Cup Events had breached obligations.
Team New Zealand and ACE have responded by denying any wrongdoing, stressing they had been open and transparent regarding the $3m sum, which they claim was paid for services.
"It is a valid charge in relation to the management and delivery of the events for the significant time spent by ETNZ team members for event related matters," the team says.
"In short, this loan discussion is unrelated to the ETNZ charges for the event work done by its staff on the creation of the concept and design for the new class of the yacht to be used in the events (a radical new foiling monohull concept) and the Class Rule itself."
Team NZ also claims that the link to the Hungarian bank was as a result of an email scam, which resulted in a payment to a fraudulent account.
It was later reported to police and the funds recovered, it adds.
"The email scam which resulted in the payment to a fraudulent Hungarian bank account was immediately disclosed… after its discovery and an assurance was given that ACE still had sufficient funds for the delivery of the events, and that it would not be seeking any further financial assistance from the hosts.
"The fraud/theft was reported to the NZ Police who alerted the relevant international authorities with all appropriate steps being instigated through Kiwibank and Bell Gully, solicitors, to attempt to recover the funds."
Newshub's America's Cup reporter Tom McRae, who has been following this story closely, told the AM Show TNZ deny the allegations.
"They claim 'insiders' were leaking misinformation to MBIE and this is part of that," McRae said.
"This confidential letter that was written by the council chief executive Stephen Town and the head of MBIE, went to Team New Zealand and it outlined some pretty serious allegations.
"The team has been given hundreds of millions of dollars of council and taxpayer money to put this event on at a world class standard.
"To be accused of taking NZ$3million of a loan and reclassifying it and paying it into a Hungarian bank account, which amounts to fraud, those are very serious allegations.
"If MBIE and the Auckland Council can stack that up, I guess that would signpost some serious concerns for the way the event is being run."
Team New Zealand boss Grant Dalton told Newshub on Tuesday that there is "nothing to this" when it comes to the fraud allegations.
National leader Todd Muller told The AM Show he's concerned about the allegations and hopes the claims are taken seriously.
"It sounds very concerning and the Government should chase it with all they've got.
"Obviously it's public money intending to support a great team that we all have a lot of faith in but the money needs to be spent in the right way."
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