The Tepaki Group in the Cook Islands says a former employee claiming defamation damages is under police investigation.
Developer Tim Tepaki says William Framhein looked after the company's accounts in the Cook Islands but there were anomalies in the accounts and the matter was referred to the police.
Mr Framhein and his partner Iva Fairbrass allege they were defamed by Mr Tepaki and director John Short in comments made to the Cook Islands News.
Mr Tepaki says he doesn't think much of the defamation claim.
"I don't believe that they have any case for defamation. If anything we should be counter claiming or claim defamation ourselves. But we're not going to do that. One, William Framhein doesn't have the money, and two... it's pointless."