The Government is investigating Team New Zealand's management and use of public money nine months out from the America’s Cup.
Taxpayers and Auckland ratepayers have stumped up $250 million for the campaign and the running of the event, but now a leaked letter shows serious questions are being asked about the syndicate's ability to deliver.
“This is not a great story for us,” Team NZ CEO Grant Dalton said.
The Government is saying that MBIE is reviewing a contractual dispute involving Team NZ.
“Allegations have been made, from different parties, in the middle of a contractual dispute. MBIE's doing a review to get it sorted. That's the priority,” Economic Development Minister Phil Twyford said.
On Monday night, Team New Zealand announced people they believe had leaked sensitive material had been sacked.
1 NEWS understands it's allegations from those people that's triggered MBIE's investigation.
“They're created by guys that we outed by motives I still don't know, actually,” Dalton said.
A separate company, America’s Cup Events Limited or ACE, has been set up to deliver the event with Dalton running that company as well as Team NZ.
Investigators are now "extremely concerned" how the $40 million of public money that was set aside to run the event has been used.
Dalton is adamant there has been no misappropriation.
“It's that sort of leading question that you can only say no to because there hasn't been and that is the answer,” Dalton said.
Under the spotlight is $3 million from the event budget which was transferred to a Hungarian bank account.
Dalton says when some of that money was paid to a European company to set up as a host broadcaster, hackers changed the bank account details.
As CEO, Dalton says he's ultimately responsible, but it was one of the sacked workers who made the transfer.
Police confirmed today they are investigating the alleged hack.
“We have engaged our NZ Police Liaison officers in Europe and we are working with Hungarian authorities,” acting Detective Inspector Bridget Doell said.
The sacked workers have now engaged lawyers while Dalton says they're cooperating fully with the investigation.
“There's no reason why the America's Cup won't go ahead and won't be a great success for Auckland and for the nation,” Auckland Mayor Phil Goff said.
Government and Team NZ now have 18 working days to ensure contractual agreements in place stay that way.