America’s Cup: No evidence of offense

Auckland, New Zealand (August 26, 2020) – In a joint statement from Ministry of Business Innovation and Employment (MBIE), Auckland Council, Emirates Team New Zealand Ltd, and America’s Cup Event Ltd, the MBIE in consultation with host partner Auckland Council has completed its audit into allegations made against Emirates Team New Zealand Limited (ETNZ) and America’s Cup Event Limited (ACE).

The audit stemmed from complaints of financial mismanagement and misuse of public funds which came from informants within (ACE). However, the Beattie Varley report found that there was no evidence of financial impropriety or misappropriation of funds.

The report also found:
• There was no loan from ACE to ETNZ.
• There was no fraud by ACE or ETNZ.
• That no personal expenses of Grant Dalton or any other personnel were paid from Crown monies,
that there has been no financial impropriety of any nature.

MBIE Chief Executive Carolyn Tremain said, “While it’s excellent to confirm that there has been no financial impropriety and the escalation process has concluded, the Beattie Varley report had raised some concerns around record keeping relating to several historical matters.”

The process began after MBIE and Auckland Council (as Hosts) were made aware of claims relating to the organization of the 36th America’s Cup, which prompted an investigation by forensic accountants Beattie Varley and triggered an escalation process under the Host Venue Agreement.

“It was important to work through the audit process, and confirm that there was no financial impropriety or misappropriation of funds,” said Carolyn Tremain.

The matter regarding the third party fraud that ACE/ETNZ were a victim of has been satisfactorily resolved from MBIE’s perspective. MBIE are satisfied that any loss as a result of this scam won’t be paid for by any Crown investment.

The Beattie Varley report noted that a contractual disagreement was outstanding, regarding whether the AC36 Event and Class Design Costs is a cost that should be borne by the event, and therefore, ultimately, by Crown investment. The Parties have agreed to go to mediation on this issue.

Carolyn Tremain said “There is no wrongdoing in this regard and the processes for resolving contractual disagreements is well established and we look forward to continuing to work constructively together on this matter. ETNZ and ACE have a different view from MBIE on whether the AC36 Event and Class Design Costs should be borne by the event.”

ETNZ and ACE CEO Grant Dalton said “With the departure of the previous event managers, we have undertaken a thorough review of our personnel and we have the team to deliver on the event. We have engaged experienced and respected senior event professionals to lead the Event preparations.”

Carolyn Tremain said, “It is in all of our interests that we continue to work together to deliver a successful event. Hosts acknowledge the positive progress ACE has made with regard to delivery planning and resourcing. Our expectation is that operational matters will continue to be resolved at the project management level.

“The Crown is satisfied to reinstate investment and once the appropriate contractual deliverables have been met, the next payment under the HVA can be made.”

Carolyn Tremain said, “The America’s Cup is an important event for Auckland and for New Zealand, and even more so as we work through and recover from the impacts of COVID-19. I look forward to working closely with ACE to deliver a world class event we can all be proud of.”

Sir Stephen Tindall, Chairman of ETNZ, said “We are pleased to have this behind us and ACE can now focus on putting on a great spectacle, and ETNZ on keeping the Cup in New Zealand.”

For the summary findings of the report as prepared by Beattie Varley, click here.

Details: www.americascup.com

36th America’s Cup
In addition to Challenges from Italy, USA, and Great Britain that were accepted during the initial entry period (January 1 to June 30, 2018), eight additional Notices of Challenge were received by the late entry deadline on November 30, 2018. Of those eight submittals, entries from Malta, USA, and the Netherlands were also accepted. Here’s the list:

Defender:
• Emirates Team New Zealand (NZL)

Challengers:
• Luna Rossa (ITA) – Challenger of Record
• American Magic (USA)
• INEOS Team UK (GBR)
• Malta Altus Challenge (MLT) – WITHDRAWN
• Stars + Stripes Team USA (USA)
• DutchSail (NED) – WITHDRAWN

Of the three late entries, only Stars+Stripes USA remains committed, however, it is unclear what entry payments have been made, nor is there knowledge of a boat being actively built or sailing team assembled.

Key America’s Cup dates:
✔ September 28, 2017: 36th America’s Cup Protocol released
✔ November 30, 2017: AC75 Class concepts released to key stakeholders
✔ January 1, 2018: Entries for Challengers open
✔ March 31, 2018: AC75 Class Rule published
✔ June 30, 2018: Entries for Challengers close
✔ August 31, 2018: Location of the America’s Cup Match and The PRADA Cup confirmed
✔ August 31, 2018: Specific race course area confirmed
✔ November 30, 2018: Late entries deadline
✔ March 31, 2019: Boat 1 can be launched (DELAYED)
✔ 2nd half of 2019: 2 x America’s Cup World Series events (CANCELLED)
✔ October 1, 2019: US$1million late entry fee deadline (NOT KNOWN)
✔ February 1, 2020: Boat 2 can be launched (DELAYED)
✔ April 23-26, 2020: First (1/3) America’s Cup World Series event in Cagliari, Sardinia (CANCELLED)
✔ June 4-7, 2020: Second (2/3) America’s Cup World Series event in Portsmouth, England (CANCELLED)
• December 17-20, 2020: Third (3/3) America’s Cup World Series event in Auckland, New Zealand
• January 15-February 22, 2021: The PRADA Cup Challenger Selection Series
• March 6-15, 2021: The America’s Cup Match

Youth America’s Cup Competition
• February 18-23, 2021
• March 1-5, 2021
• March 8-12, 2021

AC75 launch dates:
September 6 – Emirates Team New Zealand (NZL), Boat 1
September 10 – American Magic (USA), Boat 1; actual launch date earlier but not released
October 2 – Luna Rossa (ITA), Boat 1
October 4 – INEOS Team UK (GBR), Boat 1

Details: www.americascup.com