‘There’s a clear conflict of interest’: Internal Affairs ‘concerned’ over potential gambling breaches by Auckland pub baron – Stuff.co.nz

An Auckland pub baron could face a fresh Internal Affairs inquiry into potential breaches of the Gambling Act following an investigation by Stuff.

An Auckland charity paid over 600 per cent more rent when it shifted six doors along the street to a bigger building co-owned by publican Parminder Parry Singh Takhar.

At the same time, the charity saw its grants from a pokie machine trust triple the same trust that had machines in pubs co-owned by Takhar.

The DIA cleared the arrangement in December 2018, nine months after a company owned by Takhar and business partner Jay Bath bought the building, the Saanjh Sports and Cultural Club moving in shortly after when their lease expired. But DIA may take a second look after DIA gambling director Dave Robson called the money-go-round very concerning.

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Financial records show the Saanjh club which runs Indian dance classes, sports teams and a senior citizens drop-in centre paid just $25,000 a year at their old premises at 129 Kolmar Road.

But when the lease there expired, and they moved to Bath and Takhars bigger building at 129 Kolmar Rd, the rent rocketed to $137,885 a year, plus almost $40,000 invested in fit-out costs over two years.

Saanjhs grants from the Grassroots Trust, a pokie machine trust with machines in 62 North Island pubs, also rose steeply once they moved home.

Saanjh club secretary Teejay Basra said their grants had grown because the club was providing more activities and had a good relationship with Grassroots. There was no link between the move and the increased funding.

He said the Grassroots money had not been allocated to rent, but to building fit-out and salaries.

The increase in grants was because we moved into a new building and had to set it all up, our fit out was the majority of the cost.

He said rent was lower than recorded in their accounts and was just $80,000, but fit-out costs higher, covering carpets, electronics and dance studio mirrors. The new building was bigger: It has worked out well for us.

He said Saanjh knew both Takhar and Bath as members of the Sikh community, but neither was involved in the club.

In 2016-17, Saanjh received $51,900 in grants from Grassroots, and $129,469 in 2017-18.

But that climbed to $163,812 in 2018-19 and in the nine months from March-December 2020 they collected $109,567. So far this year, theyve received $141,223.33 from Grassroots. The Grassroots money is their biggest single source of income.

Section 113d of the Gambling Act prohibits key persons such as publicans from influencing the flow of gaming funds, and from providing services to grant recipients if the goods or services [are paid for by grants]. It provides for fines of up to $10,000.

In a December 2018 letter clearing the arrangement, DIA gaming inspector Artie McClelland said a complaint had been received, but he had received assurances from Saanjh that their grant money was not going to pay rent.

A senior gaming industry official said that was a woefully inadequate response from the DIA: Theres a clear conflict of interest. At the very least, the DIA need to go back and say again, please explain.

Any funding boost benefits the landlord as the recipient is better able to handle the increase in rental expense being incurred. If thats not a rort, I dont know what is.

Saanjhs financial records show they are completely reliant on donations, principally gaming grants, to survive. In 2018-2019, donations made up $284,000 of Saanjhs $311,000 revenue, and rent made up $137,885 (plus $20,536 on fit out) of their $273,020 outgoings. In 2019-2020, donations were $359,000 of $365,000 revenue, and rent was $132,368 plus $18,000 on fit out.

The source said in previous similar cases, the DIA had banned grant recipients from receiving grants from a specific trust to avoid any perceived conflict of interest.

A former gambling inspector said this type of thing goes on all the time but it can often be hard to prove if well disguised.

One problem in proving such an offence is the grant may be given for something else, but padded out to include and hide the rental.

In a statement, Robson said: The Department take allegations involving the misuse of community grant funding seriously, and if what you have outlined is true, it is very concerning.

Like all allegations we become aware of, the Department first assess the information provided, and investigates where appropriate.

Takhar, whose extensive pub interests have included the Red Fox Tavern in Maramarua (with Bath), the Village Hotel in Patumahoe, and Rewa Bar in Manurewa, all of which had Grassroots machines, refused to answer questions, directing them to Bath, saying: I dont know much about any of it.

DAVID WHITE/STUFF

The Rewa Bar in Manurewa is among Parminder Singh Takhars pub interests.

Bath said his only current bar interest was the Red Fox, where he had changed his machines last year from Grassroots to another trust, BlueSky.

He said he now had no connection with Grassroots, that it was wrong for publicans to attempt to influence the flow of gaming money, and hed never tried to do so. He said Saanjh was paying a fair market-appraised rent (two commercial property experts agreed, telling Stuff the rental rate was probably reasonable). Theres no breach if there is any breach, bring it to my knowledge.

Asked if he was saying any questions were for Takhar, he said: Thats right anything related to Mr Takhar, I cannot answer, I do not have knowledge of it.

Asked about the grants, Martin Bradley, executive chairman of Grassroots, initially said: I dont know mate, we make hundreds of grants a month.

Responding later to written questions, Bradley said: This potential issue was raised in 2018 and the situation was investigated by DIA, who found that no issue existed.

Bradley said Grassroots were aware Takhar and Bath owned the building, and had advised Saanjh in 2018 they wouldnt fund rent, and hadnt, and had always been aware of the law governing such relationships. They had never had conversations with either landlord about where grant money should be directed.

In summary, we were aware that Mr Takhar and Mr Bath controlled the company that is the landlord and no grants were made for rent, fit out or other building related costs.

Explaining the grants, he said Grassroots had a director with intimate knowledge of the South Auckland community and a complete understanding of that communitys needs and the many organisations that do a fantastic job there.

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'There's a clear conflict of interest': Internal Affairs 'concerned' over potential gambling breaches by Auckland pub baron - Stuff.co.nz