Wallace Real Estate swiftly removed several staff members from its website after questions were raised regarding their previous association with a liquidated firm currently facing a $22 million tax claim from the Inland Revenue Department (IRD). The action followed inquiries from the New Zealand Herald about the appearance of former Hills Real Estate agents – including those linked to the IRD investigation – on Wallace’s online profiles.
Luke Nutting, Chief Executive Officer of Wallace Real Estate, stated the company took the allegations made by tax authorities “extremely seriously” and expressed disappointment at only recently becoming aware of the “severity of the situation.” He confirmed that staff “recently hired” and implicated in the IRD’s investigation were no longer employed by Wallace. “As soon as Wallace Real Estate learned of the seriousness of the allegations, we acted swiftly and decisively,” Nutting said.
The IRD’s claim centers on allegations of unpaid Goods and Services Tax (GST) stemming from property sales conducted through four companies led by individuals likewise previously associated with Hills Real Estate. Liquidators have identified the companies as Akrish Properties, NZ & Auckland Developments 2000, RN Properties, and Babasiga Homes, which collectively owed $28 million but held only $38,088 in bank accounts, according to reports last week.
Prior to joining Wallace, Prakash and Prasad had utilized Hills Real Estate to advertise properties they were buying and selling as part of a property flipping operation through trading companies. The move of approximately 11 Hills staff members to Wallace prompted questions about a potential continuation of this practice, with concerns raised about whether the pair intended to trade homes listed for sale through their new agency.
Nutting emphatically denied that Wallace engages in property trading. He stated the company employs only “licensed real estate salespeople” operating solely in a commission-based capacity. “Wallace does not operate or facilitate property trading businesses, nor do we structure sales through trading companies,” he asserted. He further stated that Wallace adheres to the standards outlined in the Real Estate Agents Act 2008 in its supervision of staff.
The Herald initially observed Prakash and Prasad listed as Wallace agents on Tuesday, coinciding with the takedown of the Hills Real Estate website. At that time, the pair collectively had over 40 properties listed for sale, with as many as 14 previously advertised by Hills, suggesting a transfer of listings. Some of these properties had been previously owned by the trading companies now under IRD scrutiny.
A third former Hills staff member, previously identified as part of the Hills management team, also appeared on Wallace’s website with the title of compliance lead. Following the Herald’s inquiries, Prakash, Prasad, and this third staff member were removed from Wallace’s website.
Further investigation revealed that eight additional former Hills staff members remained listed on Wallace’s site. One former Hills employee had assumed responsibility for over 10 for-sale listings previously managed by Prakash and Prasad. A former Hills office manager was also listed as the South Auckland office manager for Wallace, despite Wallace’s website not initially mentioning a South Auckland presence. Profile photos largely matched those previously used on the Hills website.
When pressed for further clarification, Nutting denied any formal takeover of Hills Real Estate by Wallace. “Wallace has not acquired, absorbed, or entered into any formal takeover arrangement with Hills Real Estate,” he stated. He characterized the movement of staff as a common practice within the New Zealand real estate sector, with “several former Hills salespeople” choosing to join Wallace independently after leaving their previous agency. He reiterated that anyone “directly implicated in the IRD liquidation proceedings are no longer involved with Wallace in any capacity.”
The Real Estate Authority (REA) confirmed it was aware of the staff movements. A spokesperson stated, “REA is aware that these licensees moved to Wallace Real Estate. We cannot produce any other comment so as not to prejudice our processes or the rights of any parties.”
A Herald analysis last year revealed that a selection of property deals linked to the Hills team involved purchases totaling approximately $54 million and resales nearing $60 million, with some properties changing hands through as many as 11 linked companies before reaching a final buyer.
