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Government freezes America's Cup funding amid investigation into financial mismanagement

Funding for the America’s Cup has been frozen while the Government investigates claims about Team New Zealand's management and use of public money.

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America’s Cup Events has already received $29 million of the $40 million set aside by the Government for the event. Source: 1 NEWS

It comes as the Ministry of Business, Innovation and Employment launched an investigation this week into Team New Zealand and its event hosting company, America’s Cup Events Limited (ACE), this week.

MBIE tourism general manager Iain Cossar told 1 NEWS ACE won’t receive any further payments while the investigation is underway. 

“This will be revisited pending the outcome of the process,” he said.

Mr Cossar said $40 million has been set aside for the event fee and, to date, $29 million has been paid to ACE in line with contractual funding milestones.

“This process is ongoing and there are contractual agreements in place.

"As to not undermine the current process, to protect commercial sensitivity and to protect the integrity of the ongoing investigation, we are unable to go into further detail at this time.

"We will provide an update when more information is available."

Team New Zealand said it supported the freezing of the payments. 

Earlier this week, an Auckland-based consultancy firm was fired from helping set up the event after Team New Zealand accused its employees of sharing confidential information.

The alleged informants are also accused of leaking information to a government department.

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A leaked letter has revealed serious concerns about the America’s Cup host’s ability to deliver a safe and successful event. Source: 1 NEWS

Team New Zealand boss Grant Dalton denied wrongdoing in its management of public funds after it emerged money was paid to a Hungarian bank account. 

NZME also reported there were allegations a $3 million loan had been "reclassified". Dalton denied that loan was made to Team New Zealand.

The team said it fell victim to an email scam and attempts were made to recover the money. It said the claims made were “baseless”.

1 NEWS understands it's allegations from those people that triggered MBIE's investigation.

The Government and Auckland Council have contributed almost $250 million for the campaign.