Team NZ fights to keep lid on forensic report into funds
Team New Zealand is fighting to prevent the Herald from publishing details of a report by forensic accountants, which the yachting syndicate’s lawyer claims contains “scandalous allegations”.
A legal battle yesterday in the High Court at Auckland involved Emirates Team New Zealand (ETNZ), America’s Cup Event Ltd (ACE), the New Zealand Herald’s publisher NZME, the Government and the Auckland Council.
Last week, ACE and ETNZ obtained an interim High Court injunction order against NZME to prevent the media company publishing or broadcasting details of a report by forensic accountants Beattie Varley about recordkeeping and use of public funds allegations.
NZME is arguing to have the injunction order overturned on the grounds of public interest.
After being granted the injunction last week, ETNZ boss Grant Dalton emailed his lawyers and said “nice lads”. NZME was copied into the email.
Lawyer Davey Salmon, who represented ETNZ and ACE, said his clients had “absolutely no idea of the scandalous allegations” until they received the Beattie Varley report.
He said if published, the report risked “serious reputational damage” to individuals which may never be repaired.
Along with commercially sensitive information, Salmon continued, the material contained in the report was also sensitive on a sporting level.
The America’s Cup, he said, was known for having allegations of leaks and spies and “knowing anything about a competitors’ financial strategy is just dynamite”.
“It won’t help the public to know what’s actually happened [by hearing] unreliable allegations,” he said, arguing for the Beattie Varley report to remain hidden.
But barrister Robert Stewart, representing NZME, said the allegations levelled in the Beattie Varley report were of a high public interest.
He argued this outweighed any harm to individuals.
“The fact that this relates to public funds is of extreme significance,” he said. “NZME doesn’t want to jeopardise New Zealand’s defence of the America’s Cup but it does want accountability of the use of public funds.”
Former solicitor-general Michael Heron, QC, arguing on behalf of the Ministry of Business, Innovation and Employment (MBIE) and Auckland Council, said the Beattie Varley report is “confidential and is not intended for publication”.
He said it was an interim report which wasn’t intended for disclosure outside of the parties. He indicated a final report would likely be made public.
After hearing the nearly threehour debate, Justice Simon Moore reserved his decision, which will be delivered in writing at a later date.
The interim injunction orders remained until his judgment.
MBIE had earlier confirmed it suspended public funding for the 36th America’s Cup due to be held in Auckland next year. It said $40 million has been set aside for the event fee and, to date, $29m has been paid to ACE in line with contractual funding milestones.
“While Crown and Council work through this process regarding the claims made relating to the organisation of the 36th America’s Cup, we are not intending to make further payments to America’s Cup Events Limited (ACE),” MBIE’s general manager for tourism, Iain Cossar, said.
“This will be revisited pending the outcome of the process.”
The suspension of public funding came after allegations emerged involving ETNZ and America’s Cup organisers and an inquiry was commissioned by the Crown over the spending of public money, including claims of a “reclassified” $3m loan and of fraud involving a Hungarian bank account.
Dalton has said the allegations are “a deliberate, sinister, and highly orchestrated attack which includes anonymous tip-offs, recordings and document leaks”.
Some of the claims have been leaked to the Herald, which Dalton said has created a “kangaroo court trial”.
Dalton also claimed “spies” “were caught leaking confidential information and spreading “inaccurate allegations”.
A multi-national police investigation is under way into ETNZ’s allegations of a hacker posing as a European TV contractor convincing the yachting syndicate to send a seven-figure sum to a Hungarian bank account.
The Auckland City Financial Crime Unit is investigating the alleged scam with the help of officers based in Europe and Hungarian authorities, after receiving a report in December.
Dalton has said no public money was lost in the scam.
He has strongly rejected any suggestion ETNZ was involved in fraudulent activity, instead saying it had been conned.
The Government and the Auckland Council have poured $250m into hosting the next America’s Cup.
It won’t help the public to know what’s actually happened [by hearing] unreliable allegations. Davey Salmon, lawyer for ACE and ETNZ