Team New Zealand on Wednesday denied misusing public money meant for next year's America's Cup yacht race, after allegations that fraudsters siphoned funds from the organisation into an offshore bank account.
Already rocked by claims of spying and internal leaks, Team New Zealand said it had cooperated with inquiries into the missing funds.
Managing director Grant Dalton, a key figure in preparations to hold the prestigious regatta in Auckland in 2021, said money earmarked to pay a European supplier had somehow been sent to a bank account in Hungary.
"We got straight onto the fraud police, who have been working carefully out of New Zealand and into Belgium and across Interpol and we've recovered some of that money," he told radio station NewstalkZB.
Dalton said the fraud did not involve taxpayers' money and it was still unclear who was behind it.
"We were defrauded by scammers, so we don't really know and the police don't really know," he said.
Team New Zealand hold hosting rights for the America's Cup after winning the "Auld Mug" in Bermuda in 2017.
They are organising the regatta with oversight from the New Zealand government and Auckland Council, who have poured a combined total of more than NZ$250 million ($160 million) into the event.
New Zealand's Ministry of Business, Innovation and Employment has already revealed it is investigating "structural and financial matters" surrounding Team New Zealand's organisation of the race.
The New Zealand Herald, citing a leaked letter from senior government officials, said specific concerns included NZ$3 million ($1.9 million) loan to Team New Zealand that was "reclassified" for other purposes and funds fraudulently transferred to the Hungarian bank account.
Other issues cited in the letter included an unwillingness to provide information and "poor governance, including suggestions that records should be retrospectively amended".
Team New Zealand released a statement which said they "categorically deny any wrongdoing" and insisted they had already addressed the concerns.
Dalton this week revealed he had fired a number of employees for leaking confidential information, although he refused to say how many people were involved, or speculate on their motives.
Media outlet Newshub said it was told by the sacked employees that they were local contractors who regarded themselves as whistleblowers, not spies.
Dalton, who joined Team New Zealand in 2003 and has been involved in four previous America's Cups, said there was nothing untoward with the syndicate's finances.
"Absolutely no," he said. "I guess that's one of the disappointing things about all this, allegations are easy to make and they're often harder to defend," he said.