Seized Masala properties net $8m after tax evasion settlement
Properties associated with the Masala Indian restaurant chain have netted almost $8 million at auction.
The three properties, in Auckland's Mt Eden, Birkenhead and Stanmore Bay, were sold this week after being seized as part of a $34m restraining order granted over more than 30 properties linked to the chain back in 2015.
The chain reached an $8 million settlement with Inland Revenue and police earlier this year.
The Mt Eden property sold for $3.61 million, Stanmore Bay for $1.73m and Birkenhead for $2.54m.
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A spokesman for Bayleys, which sold the properties, said there were 109 interested parties in the auction room for the three auctions.
Inland Revenue Immigration New Zealand and the Department of Labour started investigations into companies and individuals involved with the Masala chain in 2012.
"Those investigations identified widespread and systemic tax evasion and immigration-related offending by those involved with the Masala group," Justice Rebecca Edwards said earlier this year.
The group reached an $8m settlement for asset forfeiture with IRD and the police in February, which the judge said "represents almost all of the unlawful benefit said to have been derived from the tax evasion offending".
The properties were used as premises for Masala restaurants or to accommodate staff of the Masala related companies.
"The settlement sum is expected to be met in full through the sale of restrained properties."
Three of the restrained properties were being marketed by Bayleys and would be auctioned individually in Auckland on Wednesday.
Bayleys North Shore commercial agent John Algie said the three properties were operating as Indian restaurants but would suit a range of uses.
These were the Indian Lounge restaurant in Mt Eden, Chutney Mary Fusion in Birkenhead, and Paprika in Stanmore Bay.
Each were in strongly positioned, high-profile locations, he said.
"They are a very attractive and well maintained converted character residential premises offering a mix of indoor and covered outdoor dining.
"They offer opportunities for investors, particularly those looking to add value, owner occupiers and also developers given favourable land zonings under the new unitary plan on two of the properties."
Justice Edwards' February judgment said while the Commissioner of Police considered he had a good case against the Masala group, "a contested hearing inherently carries risk".
"In particular, the commissioner acknowledges that the restrained properties have been subject to numerous changes in registered ownership since they were first acquired by individuals or companies alleged to have been involved with the Masala related companies."
From the Masala parties' perspective, "any contested hearing of a civil forfeiture application carries risk and the fact that there is a statutory presumption in favour of the commissioner's nominated profit forfeiture figure exacerbates the litigation risk inherent in any court proceeding".
"Overall, I consider the settlement proposal represents a sensible and pragmatic outcome which is consistent with the purposes of the act and the interests of justice. It should be approved accordingly."
One of the bosses of the chain, Joti Jain, skipped the country ahead of an appeal against her detention.
Jain was sentenced to 11 months home detention, 220 hours of community work and ordered to pay $58,000 in reparations in 2015 after admitting a raft of immigration and exploitation charges relating to workers at Masala restaurants in Mission Bay, Takapuna and Bucklands Beach in Auckland.
Workers had been paid as little as $3 an hour.
Jain, who served her home detention at her $2.75m home in Remuera, had appealed Immigration New Zealand's decision to deport her.
A hearing before the Immigration and Protection Tribunal was to have been heard in March, but Immigration NZ confirmed she left New Zealand before that date.
Her appeal was deemed to have been withdrawn and her residence visa was cancelled.
"As a result Ms Jain is now banned from returning to New Zealand," a spokesperson said.
* The Auckland Masala restaurant chain is not affiliated with the Masala cafe and bar in Wellington.