Sailors in cash stampede

By SUZANNE McFADDEN, JAN CORBETT and JAMES GARDINER

Up to 14 members of Team New Zealand's elite crew of 20 are now considering a move to foreign syndicates.

The Weekend Herald has learned that as well as three sailors going to Switzerland with Russell Coutts and Brad Butterworth, nine others have received renewed, inflated cash offers this week from the circling Seattle syndicate.

All are frontline, A-boat sailors who successfully defended the America's Cup.

The lure of these $500,000-a-year contracts from American phone magnate Craig McCaw compounds the problems stalwart Tom Schnackenberg faces in forming a new team to defend the Cup in 2003.

At the same time, Herald inquiries into the controversial handover between the old and new Team New Zealand entities have established that:

* The highly secretive outgoing Team New Zealand trust had two companies registered in Norway for unspecified financial transactions.

* Attorney-General Margaret Wilson has sought advice on whether she can prise open the trust's books.

Both Team New Zealand and its subsidiary company, AC 2000, have companies registered in Norway, described by one tax lawyer this week as a country with discreet disclosure rules for shareholders.

It is understood transactions such as the sale of international television rights are regularly directed through Oslo-registered companies.

The outgoing trust says there is nothing untoward in the Norway links.

The Attorney-General's interest in the trust's affairs is because Ms Wilson is the only person who can legally demand such disclosure from unregistered charitable trusts.

She has asked the Crown Law Office for a report on whether it is appropriate to exercise her powers to delve into a private unregistered trust.

The Trustees Association this week requested an investigation to ensure the public's faith in the integrity of charitable trusts was maintained.

Yesterday, two of the five Team New Zealand trustees, Richard Green and Roger France, emerged from behind the veil of secrecy to reject the association's claim, questioning the motives and calling the questions it wants investigated "rather strange."

In his letter to Ms Wilson, association executive officer Errol Anderson asked: why the secrecy, why form a new trust for the next America's Cup defence and why the old trustees resigned en masse.

Mr Green and Mr France said the secrecy at all levels of the organisation was a vital part of a successful defence or challenge.

The decision to form a new trust was made by the new trustees and the old trustees had not resigned - they were still in place following the handover of assets.

The trustees had been reluctant to get into public debate before now because they wanted to complete the handover of assets to the new trust. None of the trustees and nobody outside Team New Zealand's sailors, employees, contractors and suppliers had received any payment.

In the lead-up to the Cup regatta and in its aftermath, Team New Zealand refused to answer questions about its financial structure.

Management offered to open the books to the Herald more than a month ago, but then set such restrictive conditions that little if anything could have been published, so the offer was declined.

Anyone attempting to unravel the old Team New Zealand's ownership is met with a maze of companies. The trust is not registered and therefore not required to disclose any documents.

But yesterday Mr Green gave the Weekend Herald a copy of the trust deed, saying there had never been any intention to keep it secret and that it was common for charitable trusts not to register.

He said the trustees were terminating the trust because their involvement in the America's Cup was now over. The new trustees will take over the $20 million worth of assets and a $5.4 million debt.

In return, the old trust will be left with $1 million to distribute to yachting-related activities, as provided for in its trust deed, and an assurance that a further $1 million would go to similar beneficiaries.