Tag Archives: PricewaterhouseCoopers

Carisbrook Stadium Trust: Financial statements for the year ended 30.6.13

Received via Bev Butler
Wednesday, 12 March 2014 1:48 p.m.

The CST’s latest financial accounts – link to full financial statements and a copy of the summary below [click to enlarge].

CSCT Summary

Source:
[enter in your browser] *Carisbrook Stadium CT 30.6.13 signed Accounts.pdf*

Download: Carisbrook Stadium CT 30.6.13 signed Accounts (PDF, 255 KB)

For more, enter the terms *cst*, *csct*, *carisbrook*, *charitable*, *trust*, or *farry* in the search box at right.

Posted by Elizabeth Kerr

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Carisbrook Stadium Trust costs

A 2009 cashflow report suggested the total trust and administration costs for CST for the project should be $3.7 million, but in the end they were $5.4 million. (PricewaterhouseCoopers)

### ODT Online Sat, 22 Feb 2014
Council payments to trust queried
By Debbie Porteous
A stadium opponent has questioned a series of historic administration cost payments from the Dunedin City Council to the trust in charge of the Forsyth Barr Stadium’s development. Bev Butler says it remains unclear what exactly the payments to the Carisbrook Stadium Trust (CST)*, mostly labelled ”trust costs”, were for. The payments, ranging from $40,000 to $80,000 a month, were made between 2007 and 2011.
Read more

*Properly known as the Carisbrook Stadium Charitable Trust (CSCT)

Related Post and Comments:
24.1.14 Stadium: It came to pass . . .

****

Malcolm Farry re-imaged [scene.co.nz] 1[back file]
### ODT Online Mon, 12 May 2008
Stadium Trust heads to regions
By Hamish McNeilly
Representatives from the Carisbrook Stadium Trust will venture south this week, hoping to persuade people to not only support the project – but also pay for some of the Awatea St stadium. Trust chairman Malcolm Farry said the tour would be an opportunity to discuss the project and detail some of the packages available. Read more

Posted by Elizabeth Kerr

*Image: scene.co.nz – Malcolm Farry (re-imaged by whatifdunedin)

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Stadium: Accountability, paper trail leads unavoidably to NEWS

Stadium, Dunedin [espnscrum.com]Stadium under construction [photo via espnscrum.com]

Comments received.

Bev Butler
Submitted on 2013/07/30 at 2:25 pm

http://www.stuff.co.nz/national/politics/8981153/Phone-records-given-to-inquiry
Parliament’s speaker, David Carter:
“I view any actions that may put at risk journalists’ ability to report very seriously.”

Both Sir Eion Edgar and Sir Julian Smith have some explaining to do as to their “actions” in preventing the reporting of the information contained in the press release below which one of the ODT reporters contacted me about on 3 July 2013, asked me questions, then nothing being published in the ODT.

PRESS RELEASE
“Philanthropist” reneges on promised $1m donation
Full independent enquiry sought

The deceptions surrounding the Forsyth Barr Stadium continue to be revealed by official documents released on 11 June 2013.

The public, on many occasions raised doubts that the promises of private funding for construction of the stadium, had been met, but were assured by Mr Malcolm Farry, Chair of the Carisbrook Stadium Trust as reported in NBR and ODT 2007 that in fact several substantial donations had been promised. Indeed he went so far to tell the public that he had promises of three individual donations of $1 million each to be put to the costs of construction. Sir Eion Edgar also confirmed in DScene in 2009 that he would be making a donation of $1m.

That, as has now been revealed officially, was untrue.

It was also untrue as Mr Farry claimed when leading the project, that advance ticket or product sales revenue could be counted as construction capital. This was nothing other, as many ratepayers pointed out, simply advance operational revenue which could not be charged in the future. While Mr Farry denied this, the PricewaterhouseCoopers investigation found that there was little or no capital raised from ‘private funding’ for construction.

The relevance of this should not be lost when the evidence supplied to the High Court in Christchurch by the Carisbrook Stadium Trust through the DCC also stated that substantial private donations had been made for construction. At the time of the Stop The Stadium court case in April 2009, Mr Farry had stated publicly that more than $30m of the required $45m had already been contracted in private funding for construction of the stadium. It appears that evidence in the High Court case was also not truthful.

The role played by Forsyth Barr and its Chair, Sir Eion Edgar also come directly under a brighter spotlight from the release of the documentation. Sir Eion Edgar promised a substantial donation of $1m as reported in DScene 2009, but again this has proven not to be true. But this lack of philanthropy also extended to an obscuring of the facts surrounding the naming rights of the stadium. Despite Sir Eion Edgar claiming in the National Business Review (29/01/09) that a “substantial cheque” had been written for these rights, and The Marketing Bureau commissioned by the CST reporting to council the naming rights were worth $10m, the fact was that instead the stadium was named after his company for a period of two and a half years before any revenue was received. It has already been reported in the media that the naming rights were no more than $5m. An upfront substantial sum in advance reported in PwC peer reviews was somehow altered to a much lesser sum in monthly arrears payments which didn’t begin until late 2011.

Sir Edgar also had a significant role as President in his connections with the Otago Rugby Football Union when a fundraising function for the ORFU in August 2011 at the new Forsyth Barr Stadium defaulted in its payments to the Dunedin City Council leaving ratepayers to pick up the tab for booze, food, hireage and cleaning while the ORFU pocketed the gross income less a substantial organisational fee paid to the wife of the Deputy Chair of the ORFU, Laurie Mains.

While the PwC investigation was not intended to be a forensic audit of all financial matters surrounding the stadium, sufficient grounds now exist for such a full independent investigation to be carried out, and it is difficult to see just why this should be resisted unless some have got matters to try and continue to conceal. Doubts have also been expressed over the laxity of the billing and payment processes whereby blanket monthly CST accounts with no detail were passed for payment by the then CEO of the Dunedin City Council, Jim Harland, and there remains uncertainty over the validity of many of the expenses and other monies claimed for and paid by the ratepayers of the City.

[Response 1]

Elizabeth
Submitted on 2013/07/30 at 2:46 pm

Bev, quite apart from the content of the Press Release, are you saying the ODT journalist who contacted you about the release was lined up to do a story based on the content of the press release? Or that the editorial team did not support the reporter and canned the story as filed? Or for the newspaper’s own reasons there was never a story?! In other words, something of a spying mission took place?

Media can choose whether or not to cite the content of press releases in whole or in part.

Should a newspaper decline to reference a press release in its general news coverage, surely that leaves the writers of the release free to pay for an advertising statement. This is exactly what has been required with The Press in Christchurch over the fight to restore the Christ Church Cathedral – paid advertising by Cathedral advocates tied to education of the Press editor underlining the editorial bias which has run to the benefit of the Bishop and the CPT. We consider The Press’s stance deliberate to force use of paid advertising. The Press has softened since being SPOKEN TO.

****

[Response 2]

Russell Garbutt
Submitted on 2013/07/30 at 8:25 pm

Bev’s post needs as wide a circulation as possible and I would urge any readers to pass on the URL of this post to as many of their friends as possible, but it is as sure as God made little green apples, that the ODT will neither investigate nor publish anything that is detrimental to the interests of those that have certain influence and connections. I wonder if Sir Julian would be willing to show his phone records? Particularly those from the Central Otago region?

All of the material that Bev mentions regarding the naming rights is backed up by documentation – in fact so much of what Bev is talking about is now being played out in National politics with the Henry inquiry and Vance’s phone records. The story has to be dragged out before it is grudgingly admitted that a great wrong was done. And even then the perpetrators can’t get their story straight.

This is what I mean by accountability in many ways. Many have claimed that deceit, lies and obfuscation were just part of the normal business around the CST, DCC, ORFU and associated parties and it has also been suggested that this culture of deceit and lies extended to the High Court. Who am I to argue that this was not the case? But the same people’s names turn up time and time again. Reported are Farry, who continues to harangue from the side-lines, Edgar promising much and apparently confused between what is a donation and what is part of a payment for a sweetheart deal with the organisation of which he was part, or Harland, in the middle authorising payments on behalf of the ratepayers to the CST – a private Trust that remains a closed window.

And who is going to push for exposure of all the facts? We should be forever grateful for Bev’s assiduous work in prying out the necessary documentation and proof of what many have alleged for years. I can only hope that Bev Butler is, within the near future, able to ensure that any serious wrong-doing by those connected with the greatest waste of ratepayer funds, is put forward in a high profile way.

And if it can be shown in a separate jurisdiction that the allegations are well-founded – and I’m sure it can by the documentation that exists in private and on public record, then hopefully these people will be made accountable. But I’m not holding my breath.

****

[Response 3]

Bev Butler
Submitted on 2013/07/30 at 10:11 pm

Elizabeth, to now answer your questions – just briefly for now.
“The Edgar Story” was first published on Stuff News on Wednesday 3 July 2013. About an hour later the story was “pulled”.
Rarely does a story get “pulled” – it is generally due to major factual errors or a threat of defamation. As I know the information was correct then I assumed the latter.
I wrote to Fairfax management then emailed Forsyth Barr/Edgar’s lawyers. Two days later the story was published in The Mirror – a Central Otago Fairfax publication.
Interestingly, also on Wednesday 3 July an ODT reporter contacted me, questioning me about the Stuff News item. The reporter wanted to know who else I had sent the press release to. At the time I thought this was unusual – what did that have to do with reporting the news? I suspected that someone was wanting to do damage control behind the scenes. A week later I then heard from a good source that this was the case.
What really concerns me, apart from the serious issues in the press release, is the behind-the-scenes manipulation of ‘freedom of the press’. Dunedin citizens are no longer able to rely on the local media for local news. The damage done by this behind-the-scenes manipulation is dangerous. How this can be allowed to happen in a democratic society should be a concern for all in Dunedin. I don’t blame the reporter as he/she would have been instructed to question me.

[ends]

Related Posts and Comments:
18.7.13 ODT won’t touch Fairfax story
3.7.13 [Pulled!] Call for Dunedin stadium cash
24.12.12 A Christmas Tale
7.6.12 Stadium: Forsyth Barr naming rights
6.7.09 Eion Edgar on ‘stadium haters’

ODT Online:
11.5.12 $100m hotel for Dunedin waterfront [Edgar support]
11.5.12 Harbour hotel proposed for Dunedin

Posted by Elizabeth Kerr

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Stadium: Truth, usual whitewash or prosecution ?

stadium-header 2Waiting for the watery blue ink . . .

This is the test of DCC chief executive Paul Orders, firstly.
The rotten council (politicians and staff), secondly.
Conniving DCTL and DCHL, thirdly.

The following item is reproduced in full, in the public interest.

### ODT Online Sat, 11 May 2013
Council report to cover stadium review issues
By Chris Morris
One year to the day since a multimillion-dollar overspend on the Forsyth Barr Stadium was confirmed, the Dunedin City Council is preparing to reveal the lessons learned from the project. Council chief executive Paul Orders yesterday told the Otago Daily Times issues arising from the PricewaterhouseCoopers review of stadium spending would soon form part of a pre-election report to councillors.

The report – a requirement since changes to the Local Government Act in 2010 – would consider the impact of major projects dealt with by the council in recent years, and any lessons learned, he said. That would include the controversial stadium project, given the significance of the PWC report’s findings, he said. ”The PWC report was one of the milestone reports published by the council over recent years, so clearly, its significance will need to be reflected in my pre-election report.”

Mr Orders’ report would be given to councillors by August 2, and made public before the local body elections in October.

His comments came after PWC staff concluded a major study into stadium costs on May 11 last year by revealing an $8.4 million overspend, together with $18 million in interest not previously included in construction costs. The overruns, unauthorised spending and interest together pushed the total cost of the stadium up from $198 million to $224.4 million.

PWC director Stephen Drain said at the time responsibility for authorising the overspend lay with the council’s ”management executive”. Mr Orders – then only months into his new role – was asked at the time if heads should roll, but said he needed time to study the findings ”coolly and calmly”. There has been no public comment on the report’s findings since then.
ODT Link

Posted by Elizabeth Kerr

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Ombudsman assists release of CST file information

Media Release 7 September 2012
By Bev Butler

Fourteen month fight to expose CST Marketing Contract Fiasco

New DVML CEO Darren Burden Signatory – raises question is he really best person for the job?

It has taken fourteen months but Malcolm Farry, chairman of the Carisbrook Stadium Trust (CST), has finally released information to the Dunedin City Council (DCC) revealing further serious shortcomings in the competence of the CST and the last council. The release of these papers has been rigorously resisted by Malcolm Farry and he only agreed when it was made clear to him that under section 30 of the Ombudsmen Act he could be prosecuted for obstructing the release of official information.

The papers reveal the CST contracted an Auckland company, The Marketing Bureau Ltd (TMB) to raise private funds for the construction of the new rugby stadium. The CST agreed to pay:

● the Director/Manager and shareholder of TMB, Brian Meredith a $15,000 monthly retainer;
● another TMB employee a $5,000 monthly retainer;
● additional claims for “expenses” of approximately $5,000 per month;
● further claims of extra monthly work charged out at $350 per hour totalling an additional $5,000;
● a 2% commission on any private funding raised.

The amount paid out to The Marketing Bureau Ltd came close to half a million dollars.

However, the payments to The Marketing Bureau Ltd continued when the CST decided to terminate the contract thus opening up the CST to a termination payment of $222,187. This payment was approved by the CST Board and signed by Malcolm Farry, chairman, after legal advice for closing the deal was received from Farry and Co. Barristers and Solicitors.

The Marketing Bureau Ltd thus received a total of $652,809 and the question then arises just what have the DCC ratepayers received for this princely sum? It appears that “a few” reports were written suggesting uses for the new rugby stadium including papal visits, Royal Tours, major stock auctions, and Highland Tattoos as examples. Brian Meredith also reported that naming rights to the new stadium were worth “over $10m” when reality tells us all that Forsyth Barr not only paid a small fraction of this amount but only started making their first monthly payments in September 2011 after inferring in January 2009 that they had paid up front with a substantial amount.

But it is the failure of The Marketing Bureau Ltd in raising genuine private funding that reinforces the findings of the PricewaterhouseCoopers report. DCC ratepayers were consistently told that $45m would be raised by the private sector for construction. This simply didn’t happen, and as the PwC report confirmed, advance money for services is nothing other than advance revenue and just over half a million was used for private construction.

Ratepayers were consistently told that they would be liable for $91.4m for construction, but sadly for Dunedin’s sake this figure was woefully inaccurate with ratepayers being liable for $170m.

The Carisbrook Stadium Trust was acting as an agent for the DCC in this project and ratepayers were told that the Board and its Chair in particular, were “sweating over every dollar spent”. However, it seems that the CST entered into a contract which ended up costing over $650,000 for little or no benefit, and equally it seemed that the previous CEO of the DCC, Jim Harland, approved these payments to The Marketing Bureau Ltd while being party at all times to their outputs.

Read in conjunction with the full PwC report on stadium construction, these papers reveal a sorry level of business competence from the person that signed off the contract, newly announced CEO of DVML Darren Burden, the Board of the CST, the previous CEO of the DCC, Jim Harland and those City Councillors of the last Council who were determined not to ask any questions.

Further information available on request:
1. Letter from DCC cc to Ombudsman
2. TMB contract signed by Darren Burden
3. Invoice from Anderson Lloyd
4. Invoice from Farry & Co Barristers and solicitors
5. Letter relating to the settlement paid to TMB and associated invoice
6. Original LGOIMA Request
7. Settlement invoice
8. Invoices from the TMB signed by Malcolm Farry
9. Spreadsheet summary of TMB invoices
10. TMB report dated Dec 2007

Note:
1. DVML – Dunedin Venues Management Ltd
2. CST trustees are: Malcolm Farry (Chair), Eion Edgar, Kereyn Smith, Ron Anderson, Bill Baylis, Stewart Barnett, John Ward

[ends]

TMB/CST contract which the CST board approved and Darren Burden signed (with no legal advice) leaving Dunedin ratepayers exposed to hefty payments. S042000033_1208221011000  
(PDF, 647 KB)

Posted by Elizabeth Kerr

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Stadium: Forsyth Barr naming rights

From: Bev Butler
To: Craig Page [ODT]; Murray Kirkness [ODT]
CC: Chris Morris [ODT]
Subject: FW: Press Release: Forsyth Barr naming rights subsidised by Dunedin ratepayers
Date: Tue, 8 May 2012 09:00:01 +1200

Press Release:
Forsyth Barr naming rights subsidised by Dunedin ratepayers

Yet another revelation has popped out of the woodwork in the troubled Dunedin rugby stadium saga. This time, the much heralded head naming rights deal has been revealed as another non-event with the ratepayers again footing the bill.

In the original revenue forecasts for the stadium it was assumed that Forsyth Barr would pay the naming rights in full before completion of construction. This then changed to two years upfront in the revised forecasts peer reviewed by PricewaterhouseCoopers. The Carisbrook Stadium Trust (CST) provided the forecast figures and negotiated the naming rights deal with Forsyth Barr. It is now revealed Forsyth Barr signed up to their naming rights deal for annual payments NOT in advance but in arrears. Their contract was recently changed again to monthly payments in arrears. So at the time of voting in February 2009 the city and regional councillors were led to believe that the naming rights contract was for two years upfront. This is the normal commercial practice for naming rights contracts and is called “front end loading”.

The naming rights were [jointly announced] in a statement by Carisbrook Stadium Trust and Forsyth Barr on January 29, 2009; along with an announcement from Sir Eion Edgar that Forsyth Barr had paid “a significant sum”, but “certainly not” as much as the CST would have hoped, but “probably more than what Forsyth Barr would have liked to pay”.

However Bev Butler, stadium critic, was “shocked to discover that Forsyth Barr made absolutely no payments whatsoever until September 1, 2011 and then it was for one month in arrears. Forsyth Barr have had the advantage of over two and a half years of advertising locally, nationally and internationally without digging into their own pockets. Furthermore, the Dunedin ratepayers are guarantors for Forsyth Barr not paying up. The Dunedin ratepayers borrowed money to cover the naming rights and are paying interest on this loan,” she said. The information was revealed in documents received under the provisions of the Local Government Official Information and Meetings Act.

The deal struck is against the background of the so-called independent Carisbrook Stadium Trust, chaired by Malcolm Farry. Farry was the chair of the Highlanders at the time they were part of the ORFU. Sir Eion Edgar is president of the ORFU and is also a member of the Carisbrook Stadium Trust, being appointed to this position many months before the signing of the Forsyth Barr naming rights deal. Sir Eion Edgar is also of course a Director of Forsyth Barr.

“This shaky, shady, stadium project has been riddled with conflicts of interest right from the start and Forsyth Barr naming rights is no exception,” Bev Butler said. “It is now plain that the much heralded millions of dollars promised upfront in 2009 by Forsyth Barr for the naming rights to the new Dunedin stadium just never happened.”

Bev Butler

Further background:

PricewaterhouseCoopers (PwC) were contracted to peer review the stadium forecasts and produced a report on January 30, 2009. This is the same date that the ODT reported the announcement that Forsyth Barr were the naming rights sponsor. Early February 2009 both DCC and ORC councils voted to proceed with the stadium.
I recently again read through the PwC peer review of these forecasts. The relevant extracts are copied below. It appears from the PwC report that the Original Forecasts were based on receiving the naming rights “in full before the beginning of the forecast period” (see page 9 extract below). Then when PwC peer reviewed the Revised Forecasts (30/01/09) it was “assumed that there are two years of pre-payments for the first ten year contract” (see page 6 extract below).
The naming rights were expected to originally be paid in full upfront – this then changed to being two years upfront (during 2009/2010) before the completion of the stadium. This PwC peer review was presented to DCC councillors on February 7, 2009 when they made their final decision and after it was announced on January 30, 2009 that Forsyth Barr were the naming rights sponsor.
The situation now is that Forsyth Barr made their first payment on the September 1, 2011 (information obtained under LGOIMA). I had a phone conversation with Neville Frost (financial officer of DVML and former financial officer of ORFU) on September 16, 2011 where he said that Forsyth Barr had recently changed/amended their contract from annual payments in arrears to monthly payments in arrears – hence the first payment on September 1, 2011 (note the stadium opened 1/8/11). I suspect the change in the contract was because I had requested under LGOIMA whether Forsyth Barr had made any payments.
It appears that this ‘private funding’ naming rights contract has been amended after the final vote occurred. These amendments clearly disadvantage the ratepayers of Dunedin. The councillors and public at large were led to believe by The Marketing Bureau (contracted by CST) that the naming rights were for $10 million.
It is also relevant that Sir Eion Edgar (director of Forsyth Barr Ltd) was chosen and appointed by Malcolm Farry as trustee of the Carisbrook Stadium Trust (CST) sometime before the August 13, 2008 – at least five months before the announcement of the naming rights. So Forsyth Barr negotiated with the CST the naming rights contract at the time when Sir Eion Edgar was a trustee. Clearly, a conflict of interest.

From PricewaterhouseCoopers Peer Review of the Proposed New Otago Stadium Forecasts report (dated 30 January 2009):
Link to full document (PDF 7.1 MB)

Relevant extracts:

Page 6 “There are no cash inflows for Lounge Memberships and naming rights in 2019 and 2020 as it is assumed that there are two years of pre-payments for the first ten year contract period ending in 2020 but no pre-payments for the subsequent ten year contract period.”

Page 9 The variance between licence fees/premiums in the Revised Forecasts and the Original Forecasts is primarily a result of changes to:

● Naming Rights – the inclusion of revenues from the sale of the naming rights for the first ten years of operation. Under the Original Forecasts, this was expected to be received in full before the beginning of the forecast period.

Note in the NBR news item below it states that “it hasn’t stopped local broking house Forsyth Barr from writing a “substantial” cheque to secure the naming rights to the new Otago stadium.”
This implies or rather states that Forsyth Barr wrote a cheque back in Jan 2009. Obviously, untrue! Forsyth Barr made their first monthly payment on September 1, 2011.

National Business Review
7:59PM Wednesday 11 April 2012

Forsyth Barr ignores recession to buy Otago stadium naming rights
By Lucy Craymer | Friday January 30, 2009
A global economic downturn might make other corporate sponsors think twice but it hasn’t stopped local broking house Forsyth Barr from writing a “substantial” cheque to secure the naming rights to the new Otago stadium.
The new 30,000-capacity stadium, which is due to be completed in time for the 2011 Rugby World Cup, will be called Forsyth Barr Stadium at University Plaza.
Forsyth Barr chairman Eion Edgar refused to say how much the naming rights of the stadium had cost the company but did describe it as “substantial”.
“This will raise our profile as we expand around the country. The Stadium adds another dimension to Dunedin and Otago and is something our people will use and be proud of,” he adds.
Stadium Trust chairman Malcolm Farry says: “This is a very significant milestone in the community’s progress towards achieving the private sector funding target set by councils of $27.3 million.”
The naming right deal comes at a time when other large corporate sponsors have pulled out of deals. Philips withdrew as a sponsor from the All Blacks last year while ING have cut back on their Formula 1 spending.
The University of Otago has secured the naming rights to the Stadium Plaza.

[ends]

Posted by Elizabeth Kerr

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RESIGN: Placard Monday’s city council meeting

Call goes out – from the Citizens

Dunedin City Council meeting
Monday, 14 May 2012, 1.00 PM
Council Chamber, Municipal Chambers

[Agenda and Reports]

A lot of media will be at Monday’s 1pm Council meeting.

This is an opportunity to put pressure on pro-stadium councillors to RESIGN.

As many people as possible are invited to attend this meeting with signs demanding pro-stadium councillors RESIGN.

A simple sign with resign on would do: RESIGN

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