HERALD WEEKLY ISSUE 570:29 June 2011

Company which managed Tepaki’s hotels facing BTIB enquiry

Terry Rangi, CEO of the Business Trade Investment Board(BTIB), advised the Herald on Tuesday afternoon that as a result of a complaint lodged by developer Tim Tepaki, the BTIB is making enquiries into the actions of Rarotonga Resorts Management Ltd (RRM) the company which took over management of the three boutique hotels owned by Tepaki (Lagoon Lodges, Castaways and Manuia Beach) shortly before NZ receivers Price Waterhouse moved in placing Tepaki’s NZ finance company, Strategic Finance into receivership.
In brief, two of the hotels were placed in receivership as RRM had not kept up payments to Strategic Finance, a situation Tepaki claims involves fraud and which Tepaki claims will be the subject of legal action he intends to pursue later.
Rangi said he has written to Robin Eggleton, Managing Director of Rarotonga Resorts Management Ltd (RRM) for three reasons ;
(1) to query the expiry of their foreign enterprise approval dated July 2010 and
(2) to ask a few questions regarding their activities since the expiry of their approval
(3) lastly to ask for their view over some concerns raised by Tim Tepaki over how they have been managing their operations.
Rangi said he has given RRM two weeks to respond that time limit expiring this Friday.
The Herald has a copy of the letter sent to RRM but due to its length, it is not possible to print it in its entirety.
On the issue of the company’s status, Rangi noted as follows in his letter;
“On 30 July 2009 RRM applied for and was granted an extension of its foreign enterprise registration for a further 12 months. Again the Board imposed some conditions as before on the following basis:
1. That a progress report would be provided to the BTIB by 15 August 2009
2. That medical reports would be provided for Robin & Kim Eggleton
3. That the properties accredited under the Cook Islands Tourism scheme
4. That Tim Tepaki would endorse this arrangement.
In respect to the request above I would like it noted that although we have evidence that the properties obtained accreditation and Tepaki did provide endorsement for your approval on both dates, RRM did not provide the progress reports and medical reports as required.
As a formality I wish to advise that your foreign enterprise registration expired on 30 July
In commenting on Tepaki’s complaint, Rangi advised RRM;
“We have met with Tepaki following his recent court action against RRM and others and are
concerned that this matter may be heading for criminal proceedings, the effect of which will be unwanted media attention on investment in the Cook Islands.”
Rangi ends his letter to RRM saying;
“As you can appreciate there are some serious questions raised in the complaint by Tim Tepaki with possible breaches of the Development Investment Act. This brings in to question our own due diligence processes but more importantly the manner in which our legislation is perceived and treated by the international business community. Quite simply this Government will not tolerate an abuse of our laws.
It is my understanding that Tepaki will be filing criminal charges against you and obviously we are concerned with the level of media publicity that this will generate.”
Rangi told the Herald that after dealing with RRM, BTIB plans to raise a number of issues with Strategic Finance and following that, Price Waterhouse.
The Herald will be following progress with this enquiry by the BTIB.

Herald Issue 554 09 March
- Norm exposes Trio of Doom
- Briefs from PM’s media conference Tuesday
- Tourism Industry ponders $5 million draft strategy
- Norman George resigns from Cook Islands Party
- Letter of Resignation from CIP
- Norman selfish says Prime Minister

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