Heart of the City may prosecute

Alex Swney. Photo / file

Swney charges cast shadow over body’s annual meeting.

Auckland's Heart of the City, allegedly ripped off by its former chief executive, has not ruled out civil proceedings or complaints to the Serious Fraud Office if irregularities are found.

The publicly-funded organisation's former head, Alex Swney, 57, appeared in Auckland District Court accused of evading taxes of $1.8 million.

Heart of the City - registered by Swney in 1994 - has income-tax exemption because it was created to develop or increase amenities for the Auckland public.

But after building it up over two decades, Swney now faces 39 charges laid by Inland Revenue which allege that, as well as evading tax, he falsified invoices associated with the organisation and diverted money into accounts shared by him and his wife, Ange Marshall.

Heart of the City had its annual meeting yesterday in downtown Auckland, where board chairman Terry Gould acknowledged the trying circumstances in which the body now found itself.

"The recent termination [of Swney's contract] and associated ... allegations have clearly been extremely disappointing and gravely concerning," he said.

Mr Gould said the allegations should not detract from the sterling work done by the organisation but they could not be ignored.

"About six weeks ago my intention was to focus almost entirely on our great work and many achievements, but the events of the last couple of weeks have obviously changed that," he said.

He told stakeholders and board members that forensic accounting being done by McGrathNicol was in a "knowledge-gathering phase" and it would probably be some time before there were substantial results.

Mr Gould expected a preliminary report in the next couple of weeks and said Heart of the City would be in frequent communication with the Serious Fraud Office.

There was also the possibility of civil action if anything was found that appeared to be irregular, but advice would be taken before a decision was made.