The Department of Internal Affairs (DIA) is investigating a complaint about the use of pokie machine grants made to the Supreme Sikh Council of New Zealand.

Class 4 gaming trust Rano Community Trust made two grants to the council in the years to March 2020 and 2021, totalling about $220,000.

The council, a registered charity, wanted to set up a culturally appropriate cremation centre at 6 Maich Rd, Manurewa, said a lawyer acting on behalf of Rano.

“The grant application noted that the South Asian community does not have their own funeral service in New Zealand,” the lawyer said in a statement.

“Having a specialist funeral service is very important as it would enable South Asian customs and rituals to be honoured and freely performed. 

“The grant application noted that the proposal had been discussed with the wider community and extremely positive feedback received.”

According to its annual returns on the charities register, the council paid out the exact amount it received in grants ($99,946 and $123,000) to a company called Three Guys Investment for “rent and OPEX (operating expenditure)”.

A crematorium in a former RSA

The property at 6 Maich Rd is a former Returned and Services’ Association (RSA) clubroom, which featured a bar and gaming room. Bayleys listed the property after the local RSA branch voted to sell in 2018.

Property records show Three Guys Investments did own the building, however, it was listed for sale again by CBRE in 2021. The records list Three Guys as former owners.

Resource consent was granted in November 2021 to set up a gym on the site (CityFitness), said an Auckland council spokeswoman.

“We can confirm that no resource consent applications have been lodged or processed to date for a crematorium on this site,” she said.

So where did the $220,000 go?

Ranvir Singh, who is listed as an officer of the Supreme Sikh Council of NZ, said in a statement that the Maich Rd property was leased “with good faith” to establish the first cremation centre for the Indian community.

“Feasibility was carried [out], many meetings took place with different agencies,” but the site wasn’t appropriate, he said.

Singh said the property was used for “community events” while feasibility work was done, and the grants were used to pay rent. The council was committed to answering any questions from Internal Affairs, he said.

The council didn’t answer a question about whether it was right to be using pokie money to fund a culturally-appropriate crematorium, because Sikhism frowns on gambling.

Three Guys Investment

The lawyer for Rano said the council’s grant application included the lease with Three Guys Investment and Rano was fully aware the grant money was used for rent and OPEX. It wasn’t aware of the internal Affairs investigation, but Rano would cooperate fully if it was approached, he said.

“Making grants for rent for community buildings, including a non-profit, culturally appropriate cremation centre, is an authorised purpose which Rano Community Trust may support by way of grants.”

BusinessDesk tried to contact Three Guys through an accountant who worked for the company and via a liquidator appointed to a related company with the same shareholding, Three Guys Hospitality.

No one from the company responded.

According to a Stuff report, concerns have been raised with the Department of Internal Affairs before about the use of pokie money in connection with one of the company’s shareholders, Parminder Singh, an Auckland publican. The department previously cleared the arrangement.

The lawyer for Rano said the trust had no concerns about Parminder Singh’s involvement with Three Guys. Rano had no gaming machines on his premises and never had. 

The complaint

Canterbury grants researcher Bridget Frame made the original complaint to the DIA  about the council and its use of pokie grants. She came across the $220,000 through her research looking at Rano as a new entrant to the Canterbury market. 

In an interview with BusinessDesk, Frame said the size of the grants stood out. In the two years preceding the years to March 2020 and 2021, the Supreme Sikh Council of NZ had declared yearly income of about $20,000.

(An affiliated entity, the Supreme Sikh Society of NZ, which shares the same address as the council, had the most-approved grants of any organisation from class 4 gaming societies in 2021, according to DIA figures).

Frame also found it “unusual” that the grants exactly matched the outgoings to Three Guys.

“There aren’t many grant makers that would cover off a specific line item like that,” she said.

The lawyer for Rano said the situation with the council wasn’t unusual. It was a requirement of the Gambling Act that the money received by the council should be paid out for the approved purpose (rent and OPEX), he said.

Class 4 gaming societies distributed about $270 million in grants in 2021. Despite the source of the money – typically from poorer socioeconomic groups – and its importance as a funding source for community groups, Frame said there was minimal scrutiny of the grant-making process.

“People don’t look at it, because the power sits with those who give the money away,” she said.

“To critique puts you on the back foot when it comes to future funding decisions that are made.”

In this instance, Frame suggested more due diligence could have been done, instead of paying out $220,000 for a crematorium that, in the end, wasn’t found to be feasible. 

As with all grants, the money could equally have gone to another project with, arguably, greater benefit to the community.

DIA: no comment

In a statement, a DIA spokesperson said the various parties involved with the complaint were subject to the Charities Act or the Gambling Act, both of which are administered by DIA.

“The department has opened an initial inquiry following a complaint against the Supreme Sikh Council of NZ, a registered charity,” the spokesperson said.

“As this matter is subject to our regulatory processes, the department is unable to comment any further at this time so as not to prejudice the ongoing investigation.”