Charity charged in pokie rort

Court charges threaten the Lion Foundation. Photo / Hawke's Bay Today

One of the country's largest charities has been accused of turning a blind eye to an alleged pokie machine scam.

Five charges of breaching the Gambling Act were laid against the Lion Foundation in the North Shore District Court last week. The charges relate to how much the foundation knew about "a key person's" involvement with Southland Rugby and an Invercargill restaurant over pokie grants.

That person, whose name is temporarily suppressed, appeared in Invercargill District Court earlier this month on five charges relating to $200,000 of pokie money.

It is alleged that he used his involvement with the Invercargill restaurant, which operates pokies on its premises, to benefit the rugby club and the restaurant.

Department of Internal Affairs investigators allege the Lion Foundation, keen on expanding its gaming operation, offered nine provincial rugby unions the opportunity to increase their grant income in return for sourcing pokie venues for it. Southland Rugby allegedly agreed to the arrangement.

The foundation, which has donated more than $500 million to community organisations (including sports clubs) over the past 25 years, has the names of several influential New Zealanders attached to it. Board members include former Labour Cabinet Minister and Wellington Mayor Fran Wilde.

Foundation chief executive Phil Holden has held senior roles with Auckland Rugby, Lion Breweries and Watties Food. Holden was also the head of marketing for Cerebos Greggs.

The foundation declined to comment on the charges, saying it would be inappropriate to comment on matters before the court. However, one person close to the foundation called the charges "a joke". The source said the charges would not stand and were "vexatious".

It is not the first time that the foundation has been rocked by a pokie scandal.

In August, its sales and operations general manager Grant Paterson quit after being caught in a sting operation that allegedly recorded him making promises about grants.

Paterson said at the time he had resigned to "pursue other opportunities".

At the time, Department of Internal Affairs gaming compliance director Mike Hill said a publican had supplied the department with a tape relating to Paterson.

He said the matter was only part of wider investigations which were ongoing at the time.