Iwi probes $20m trust account gap

A $20 million hole in the accounts of the central North Island iwi has raised questions about the way settlement money was used, including whether payments followed proper process and were adequately justifed.

The Tuwharetoa Settlement Trust has launched an internal inquiry into investment and spending decisions made after a $66 million settlement five years ago.

General manager Temuera Hall, in a letter to iwi members, raised possible court action against iwi leaders who were the original trustees and saw the settlement through to completion.

The money was part of the biggest Treaty of Waitangi settlement in history and was dubbed the "Treelords deal" when signed by the outgoing Labour government in 2008.

The Tuwharetoa Settlement Trust was set up in June the following year to manage the funds "to deliver benefits to our hapu and whanau for generations to come", according to minutes from its first meeting.

But Mr Hall said in a letter to members sent on Monday that just $16 million was left of the $66 million after payments to hapu groups.
The payments to the hapu groups are set out in the settlement agreement.

In the letter signed by Mr Hall, he claimed the trust had "lost $9 million of that capital and overspent on other matters to the sum of $11 million".

Mr Hall said an independent review into "the actions of prior initial trustees" was being sought and would consider, among other issues, "payments made to contractors or management without proper process and accounting for amounts which are not adequately justified".

It would also focus on $2.175 million lost investing in carbon farming - growing trees purely for the carbon credits - and other energy projects.

The letter to members also pointed to $10.3 million put into Te Whenua Venture Holdings, a company set up to develop a golf course, a sports academy, residential sections and a hotel near Turangi. Companies Office records show it went into liquidation in August 2011.

He said the inquiry would also look at money loaned to an iwi trust with an interest in the Tokaanu Hotel outside Turangi "as a result of which $556k [$556,000] remains owing and may not be recoverable".

Mr Hall told members any legal action through the courts would have to be balanced against the defence available to trustees they had "acted honestly and reasonably". He said the cost of legal action and the former trustees' "ability to pay any judgment" would also be considered.

The meeting, called for August 23 in Taupo, sought support for the current trustees to take action.

"The outcome may be that we decide not to pursue the prior initial trustees in the courts but instead deal with the matter internally which will allow us to move forward in a positive way." Mr Hall did not return calls last night.

The trust was established in 2009. Annual reports for the trust show payments for administration, governance, project management and professional services went from $1,140,000 in 2010 to $3,700,000 in 2012.

- by David Fisher, NZ Herald

Forestry settlement
The Tuwharetoa forestry settlement was the largest ever when signed by the iwi and then Treaty Settlement Minister Michael Cullen in 2008. The Tuwharetoa Settlement Trust was set up in June 2009 to accept and manage the settlement which included:
• a cash payment of $66 million;
• a share of 176,000 hectares of central North Island forests;
about $3m a year of Crown Forest licence fees;
• carbon credits;
• first rights to buy Crown assets.

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