Motorsport: Police investigate Aussie A1GP collapse

New Zealand's A1GP car 'Black Beauty'. Photo / Andrew Warner

BRISBANE - Queensland police are investigating possible fraud involved in last year's A1GP debacle, as two scathing reports emerged on the organisers and the government's role in the failed Gold Coast motor sport event.

The reports were tabled in state parliament as the Queensland government wound up the Gold Coast Motor Events Company - in which it had a 50 per cent stake in partnership with events firm IMG - and handed the reins of the annual event, as well as A$6.5 million ($8.26 million), to V8 Supercars.

The 20th year of motor racing on the Gold Coast will see 17 V8 Supercar teams, including international racing stars, in a 600km endurance race run in two 300km phases in an event called the SuperCarnivale.

The announcement came as Auditor-General Glenn Poole's report found the due diligence process behind last year's Super GP was "inadequate", as were the contract arrangements.

The report said once event organisers were informed in July 2009 that A1GP Operations Ltd had been placed in liquidation, no independent advice or analysis was sought on whether the A1GP group could still fulfil its agreement.

It notes that the first payment of A$1.8m to A1GP was made a day after advice of liquidation and 14 days earlier than contracted.

The second report, by independent reviewer David Williams, found reports of the series' finances before the contract was signed should have concerned organisers.

But former sport minister Judy Spence has denied claims in the Williams report that she rushed negotiations and set a tight 14-day deadline to finalise the deal.

In a letter tabled in parliament, Ms Spence said she gave no timeline and the decision on the race was made by Ms Bligh and former Gold Coast Events chairman Terry Mackenroth, a former state treasurer.

Ms Spence said she had been "excited" by the Japanese Formule Nippon, but Mr Mackenroth, who had "close ties" with the A1GP, had advised it was the "only viable alternative".

Mr Mackenroth has been sought for comment.

Premier Anna Bligh told reporters in Brisbane she accepted there had been a "serious breakdown" in controls, costing taxpayers A$4.3m in A1GP payments.

"This was a high-pressure environment where things were moving very quickly, where decisions had to be made quickly to secure an event that was at serious risk of going under," she said.

And the A1GP had not acted in good faith in its dealings with the government, she said.

"A number of matters involving the A1GP and its conduct have now been referred to the Queensland police for investigation into possible fraud," she said.

"I think that highlights the seriousness of the situation and the very poor form with which A1GP conducted itself."

Opposition Leader John-Paul Langbroek said the government had foolishly not listened to concerns about the race.

He singled out "incompetent" Sport Minister Phil Reeves and called for his sacking.

Ms Bligh said the latest contract with V8 Supercars took into account recommendations by the auditor-general and Mr Williams.

- AAP