The Office of the Auditor-general has put on hold a planned inquiry into the strategic alliance between Queenstown Airport Corporation (QAC) and Auckland International Airport Ltd (AIAL) because of the legal proceedings filed with the High Court at Invercargill regarding the issue.
Queenstown Community Strategic Asset Group wrote to the auditor-general last month asking it to investigate the alliance, which was publicly announced on July 8, in which a 24.99% new shareholding was created and sold to AIAL for $27.7 million in the first of two proposed transactions.
The second transaction could see AIAL increase its interest to between 30% and 35%, following council-led community consultation, with a deadline of June 30, 2011, for that to be approved.
On Tuesday, the strategic assets group and Air New Zealand filed High Court proceedings against QAC, AIAL and the Queenstown Lakes District Council.
Queenstown Community Strategic Asset Group spokesman John Martin said the group had asked for a declaratory judgement on the issue and for an injunction to stop any further decision being made with respect to the AIAL's shareholding.
Yesterday, an Air New Zealand spokeswoman said the company believed the lack of consultation by the QLDC and its decision on the sale "fail to comply with several sections of the Local Government Act 2002".
"Air New Zealand will seek interim orders to prevent any increase in AIAL's shareholding above its current levels pending the outcome of the above proceedings, unless suitable written undertakings are provided.
"This is a particularly important and strategic issue in the Queenstown community and Air New Zealand supports the community's concerns."
QLDC communications manager Meaghan Miller said the council "would be open to a review" by the Office of the Auditor-general. However, the office said it was now inappropriate for an inquiry.
Auditor-general communications adviser Anna Will said the office "had been preparing to announce and carry out an inquiry".
"Now that legal proceedings have been filed, we have put our inquiry on hold and are watching events with an open mind as to whether we continue with an inquiry at some later stage.
"In the first [instance], it would not be appropriate for us to continue the inquiry while the matter is before the court, because of the high probability that any issues we chose to focus on would be matters currently before the court."
Mr Martin said the court would now "effectively ... do the work that the [auditor-general] was going to do".
