Barfoot & Thompson agent Deepak Goyal says the money was lent to developer Manjit Grewal, and he only decided to purchase the properties himself to prevent the investor defaulting.
Barfoot & Thompson agent Deepak Goyal says the money was lent to developer Manjit Grewal, and he only decided to purchase the properties himself to prevent the investor defaulting.
A real estate agent accused of using a developer as a "front" to buy properties in his own name says he loaned $130,000 to the man without documenting the lending or discussing repayment.
Barfoot & Thompson agent Deepak Goyal says he'd only known Manjit Grewal for up to five months when he handed over the money, but the informal financial arrangement was common in Indian culture.
Prosecutors say Goyal was either "hopelessly naive" or not telling the truth.
Goyal told a Real Estate Agents Disciplinary Tribunal hearing yesterday he was a "rising star" at the firm's Papatoetoe office, bringing in about $500,000 in gross commission in his first year.
But he is now facing misconduct charges in connection with the sale and purchase of two neighbouring Pakuranga homes on Grassways Ave to Grewal in late 2014 and early 2015.
Real Estate Agents Authority investigators says he acted as an agent, earning commission on both sales, before secretly paying Grewal about $130,000 towards the deposits, then purchasing both properties himself through a newly formed company.
He is accused of deceiving the vendors and breaching his fiduciary duty by failing to declare a personal financial interest in the two transactions.
Goyal Lane in Pakuranga Auckland. Photo / Doug Sherring
Goyal admits unsatisfactory conduct but denies acting deceptively. He says the money was lent to Grewal and he only decided to purchase the properties himself to prevent the investor defaulting.
Goyal was grilled yesterday by prosecutor Michael Hodge, who repeatedly questioned the agent's version of events.
"You knew very well that you were buying these properties and you've just kept it silent from your clients.
"This was always your development."
Goyal replied: "No, not at all. Why would I use Manjit?"
Hodge asked about the money forwarded to Grewal in numerous online banking transfers, saying it was "extraordinary that you're just happy to keep paying out money without any real questions about what he's doing with it or how he's going to repay it".
Goyal told the tribunal Grewal was his biggest client, accounting for more than half his business, and he felt he had little choice.
He also believed Grewal was good for the money and would repay him when he sold other investment properties, but later drafted a loan agreement when he grew "worried" about the developer's financial situation.
Goyal admitted failing to make necessary disclosures to his vendors.
"It must have occurred to you that if you were loaning $100,000 in relation to the property purchase you had a conflict because you had a personal interest," Hodge said.
Meanwhile, Grewal told the tribunal he signed official documents, including the loan agreement, with his "eyes closed", not even bothering to read them.
But he denied misleading investigators about his role in the transactions.
Goyal's lawyer Tim Rea suggested Grewal had always intended to develop the properties himself.
But those plans fell apart after Grewal "over-extended" himself with other property deals and could not raise sufficient finance.
Grewal only alerted one of the vendors to the alleged scheme to get Goyal "into trouble" after the agent refused to transfer the properties back into his name.
Grewal denied this, saying he agreed to help Goyal buy the properties due to their friendship and shared Indian heritage.
