Masala bosses forfeit $8m in property
The principals involved in the Indian restaurant chain Masala have agreed to forfeit $8 million in property, following an investigation that “identified widespread and systemic tax evasion and immigration-related offending.”
In a judgment issued late yesterday, Justice Rebecca Edwards said the “pragmatic” agreement between the police and a number of Masala-related companies would be a full and final settlement of all claims the police had brought.
A condition to the settlement was that Inland Revenue could not pursue unpaid tax, penalties and interest, although the judge noted the IRD could still bring criminal charges, including those for tax evasion.
“The settlement sum of $8 million represents almost all of the unlawful benefit said to have been derived from the tax evasion offending,” Justice Edwards said.
“The settlement sum is expected to be met in full through the sale of restrained properties.”
The judge said a contested hearing would be risky for both sides so the settlement was in the public interest.
“There will also be a very considerable saving of time, resource and cost if the settlement is approved,” she said.
“It also reduces the ability of those associated with the criminal activity to continue with that criminal enterprise.”
Settlement discussions were complicated by the number of properties involved, a cross-security lending arrangement and a number of third parties with interests in the restrained properties.
“In my view, settlements in cases of this size and complexity should generally be encouraged by the court,” Justice Edwards said. “The approval of the terms of settlement furthers that purpose.”
Thirty-four properties said to be worth $34 million were frozen in December 2015, which the Masala bosses initially opposed.
The restraining order was sought following a joint investigation by Immigration NZ, the Ministry of Business' labour inspectorate, IRD and police, which began as early as 2012.
Read the judgment here.
Famous for its cheap curry offerings, most notably a $10 special, popular Auckland-based Indian restaurant chain Masala grew rapidly across the city.
Rupinder Chahil, who set up the first restaurant in 2002, found a partner in Joti Jain on a number of the restaurants. She became operations manager and later co-controller.
Before long, Masala occupied major spots in Auckland suburbs like Mission Bay, Bucklands Beach and Mt Eden.
Mr Chahil’s brother-in-law, Rajwinder Grewal, was also involved in the business until mid-2004, before opening his own set of restaurants throughout Auckland.
Another man, Supinder Singh, directed various entities, which together own eight Masala restaurants, as well as two further restaurants in Auckland being developed.
Together, the four and various relatives ran the group through a string of entities, amassing 33 residential and commercial properties.