Delta CEO Grady Cameron
Dunedin Mayor Dave Cull says the integrity of the Dunedin
City Council's companies is on the line after the Office of the
Auditor-general yesterday launched an inquiry into land
purchases by Delta.
The investigation would examine all aspects of the
council-owned company's decision to spend $14.12 million on
property at Jacks Point, in Queenstown, and Luggate, near
Wanaka, in 2008 and 2009.
That included how and why the purchases were made,
consideration of risks, compliance with legislation, and the
identification and management of any conflicts of interest,
the OAG statement said.
The Auditor-general would also consider to what extent the
council - as the shareholder of Delta's parent company,
Dunedin City Holdings Ltd - was involved, and any other
matters considered "desirable" to report on.
It was not yet known how long the inquiry would take, but
"relatively contained" inquiries usually took up to three
months, while more complex investigations could take six to
12 months, the OAG statement said.
The inquiry could see those involved required to provide
information and give evidence under oath.
Yesterday's announcement came after confirmation last month
Delta had written down the value of its investments by $9
million, including by $7.5 million for the Jacks Point and
The company paid $8.82 million for 9.4ha of land at Jacks
Point, and $5.3 million for a 50-50 stake in the joint
venture property development at Luggate.
Mr Cull yesterday told the Otago Daily Times the inquiry came
after he contacted the Auditor-general's office in early
October to discuss information he had received that was "new
to me" about the company's purchases.
He would not say what the information was, other than it came
from "a variety of sources", covered "a number of things",
and "clearly" raised concerns.
"There's clearly questions and concerns that go to the heart
of council and community confidence in the integrity,
potentially, of council company process." Delta chief
executive Grady Cameron issued a brief statement late
yesterday, saying he "welcomed" the inquiry and "the
opportunity for an independent review of the decision-making
The company would "co-operate fully" and adopt any
recommendations that followed, he said.
"We look forward to the outcome." He would make no further
comment until the inquiry was complete, and has declined
repeated ODT requests for an interview this week.
DCHL chief executive Bevan Dodds said he was yet to hear from
the OAG and did not expect to be "too involved" in the
inquiry, but would co-operate if contacted.
DCHL chairman Denham Shale - who was appointed after the
purchases - said he looked forward to the inquiry's findings,
but would not comment on transactions dating back years "made
in the climate of the time".
Details of both property deals were reported in 2008 and
2009, but claims of conflicts of interest and other concerns
have continued to swirl.
Cr Lee Vandervis - who also complained to the
Auditor-general's office earlier this month about the
purchases - said he was pleased by the OAG's decision to
investigate, and the scope of the inquiry.
It was "too early to tell" who was to blame, but if mistakes
were identified, heads should roll, he said.