An investigation into "abnormalities" in the trust account of a 10-branch Auckland Harcourts business has been referred to the Real Estate Agents Disciplinary Tribunal.
The case involves former agent Gurpreet or Preet Grewal and the big multi-agency Harcourts Preet & Co Group. About $1.7 million of trust account money is said to be involved, according to a person familiar with the situation.
A Real Estate Agents Authority spokeswoman said today the Preet & Co case had been referred to the higher authority.
"The REAA has completed its investigation into the abnormalities in the trust account of Preet & Co. The matter is now in the hands of the tribunal," she said.
Independent complaints assessment committees are formed by the authority to examine such cases and in some instances, refers them to the tribunal. The tribunal then hears and decides cases against real estate agents "where the complaints assessment committee has laid charges of misconduct", the authority says.
The tribunal is separate from the authority and is part of the Ministry of Justice.
The spokeswoman said Grewal's licence was voluntarily suspended on October 9.
The Harcourts Preet & Co headquarters are in Manukau, according to its website, and it has branches in Botany, Ellerslie, Manukau, Otahuhu, Howick, Manurewa, Meadowlands, Pakuranga and Papatoetoe.
It has a separate property management division, Preet & Co Rentals, which says: "If you own a rental property and are looking to maximise your return, consider the team at Harcourts Preet & Co.
"With industry-leading systems and procedures, our philosophy of continuing innovation ensures you and your property are in the best hands."
Authority chief executive Kevin Lampen-Smith last month confirmed his organisation was working with Preet & Co and Harcourts as a result of its investigations into what he called "abnormalities."
He said: "We are confident that no consumers have lost funds as a result of the abnormalities in this trust fund. As our investigations are ongoing we are unable to comment further."
Grewal, managing director of Harcourts Preet & Co Group, said last month he had discovered an issue in August.
"In early August I discovered a discrepancy in the trust account funds and immediately notified the auditors and Harcourts," Preet told the Herald.
"No funds were ever transferred to me. No one has suffered any loss and I have stepped down while the Real Estate Agents Authority investigates as that is the appropriate thing to do," he said.
Two of Grewal's businesses are now with voluntary administrators after a creditor moved to appoint Jeff Meltzer and Michael Lamacraft, of Meltzer Mason.
Companies Office records show they in charge of Preet & Co Real Estate and Preet & Co Rentals. They have control of all assets and liabilities, dealing with day-to-day operations, cash flow and creditors.
The Companies Office says: "An administrator is usually an insolvency specialist who takes control of and investigates the business and financial affairs of your company, reports their findings to creditors at creditors' meetings and puts forward recommendations about the future of your company for creditors to vote on at a final watershed meeting."
Lamacraft said yesterday a creditors' meeting was held on Wednesday: "It was a statutory meeting."
Harcourts Group national communications manager Kerri Jackson said yesterday: "It would be inappropriate to comment further on matters involving Preet & Co while the REAA investigation is underway."
Grewal said yesterday: "I agree with Harcourts Group's response that it would be inappropriate to make any comment at this time, while the REAA investigation is still underway."