America's Cup holders at loggerheads with NZ ministry

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FILE PHOTO: Christening of Britannia the America's Cup race boat of INEOS TEAM UK in Auckland
FILE PHOTO: Christening of Britannia the America's Cup race boat of INEOS TEAM UK in Auckland

WELLINGTON (Reuters) - America's Cup holders Team New Zealand (TNZ) on Tuesday launched a blistering condemnation of the government department in charge of next year's event, indicating a major falling out following an investigation into financial impropriety.

TNZ was cleared of financial wrongdoing in August following an audit of the public funding from the Ministry of Business, Innovation and Employment (MBIE) to America's Cup Events (ACE), the body organising the regatta on behalf of TNZ.

The team, however, said the ministry had acted inappropriately and in bad faith during the investigation, releasing documentation it said substantiated the accusations.

MBIE chief executive Carolyn Tremain, however, said in a statement the department had treated "all parties involved in the process with due respect and strongly refutes many of the issues raised in the letter(s)".

According to the documents that TNZ released, the ministry spent six months working with a company contracted to ACE to gather information before they told the team that allegations of impropriety had been made.

"We feel that we must now set the record straight having tried to respect a due process in this saga all year," TNZ said in a statement.

"We have wanted to avoid such a public condemnation of MBIE but given their moves to conceal their totally inappropriate behaviour through this protracted contractual process, we now feel obliged to release a suite of letters addressed to MBIE and Ministers which call MBIE to account for their actions.

"These letters paint quite a different story than that currently being presented."

The New Zealand government and Auckland Council have contributed about NZ$250 million (124.4 million pounds) to host the sailing event, including infrastructure spending.

MBIE agreed to give about NZ$40 million in funding to ACE and Tremain added on Tuesday it remained committed to the event being successful.

The 36th America's Cup will start in January with a regatta involving challengers from Italy, Britain and the United States before the winner faces TNZ for the Cup in March.

(Reporting by Greg Stutchbury; Editing by Robert Birsel)