Home builder run by crooked ex-cop leaves trail of debt and unhappy people

Friday, 15 September 2023

A building company run by a crooked former police officer owes hundreds of thousands of dollars to unhappy and nervous contractors and suppliers, and is behind on completing houses.

Christchurch-based Garden City Homes insists it is not in financial trouble and any delays with projects are due to issues outside its control.

But a contractor who’s been chasing the company for months over money believes it’s poorly run and questions whether it should be operating.

“I think they're a disgrace to the building industry,” builder Luke Adams says. “They treat tradies and clients like dirt.”

Garden City’s sole director and shareholder is Mehak Kala, but her husband, Sanjeev, is intimately involved in running the business.

He quit the police after he conned a student into giving him $1000 to help reduce a dangerous driving punishment, and was convicted of fraud in 2016. The former constable was a gambling addict and had been banned from Christchurch Casino.

Late last year, as Adams and other contractors chased Garden City for payment, the Kalas went on holiday to Rarotonga. Earlier in the year, they travelled to India to see family.

The couple lives in a modest red brick house in Sockburn, but have had plans drawn up for a 1000sqm home, complete with an indoor swimming pool, spa and sauna on Waterholes Rd, Rolleston.

Stuff has spoken to an array of contractors and suppliers - including builders, a plasterer, a painter, a handyman, an electrician, a joiner, and window manufacturers - who are collectively owed hundreds of thousand of dollars for work done for Garden City.

Some have quit working for the company, while others continue to complete jobs in the hope they will be paid.

Debt collectors and lawyers have also been involved in efforts to recover money.

Garden City, which was incorporated in 2018, is in debt to at least one major supplier. The owner of another told Stuff he refused to supply the company with materials on credit after it failed a credit check.

There have also been delays in various houses being built by the business.

Garden City’s financial woes appear to have begun in the latter part of last year, when contractors began having to chase the company for payment and building materials weren’t available as required.

Initially Adams had no issues when he started doing work for Garden City Homes in January last year. However, near year’s end, payments for some work were a month overdue, and he was owed more than $50,000 by the company.

When Adams, who felt like he was working as a project manager, contacted suppliers trying to arrange materials for jobs, he was told Garden City hadn’t paid its bills.

When he threatened to down tools, the company cleared some of the outstanding invoices.

Sanjeev Kala then told him he was chasing money from multiple clients.

Adams continued with work in the hope the situation would improve - but it didn’t. Stressed and frustrated by what he says was a poorly-managed business, and owed about $17,000, Adams quit in March.

He is still chasing Garden City for about $12,000, which Kala has repeatedly assured him he will pay, most recently on Friday.

The amount Adams is out of pocket is a fraction of what other contractors are owed.

Swift Electrical Services owner Taranjeet Singh has outstanding invoices totalling about $115,000 for electrical work he’s done for Garden City Homes.

Like Adams, payment issues began late last year.

Singh said at the time Kala told him the company was “having money issues”.

“He said… ‘I’ll pay you as soon as I can’.”

But debts continued to mount, and “I can’t trust him because it’s been happening for a long time”.

Despite meetings with lawyers, the situation remains unresolved. He’s completing projects he’s already started for Garden City in the hope he’ll get paid when they’re finished. But he won’t be taking on any new work for the company.

“My wife is totally upset. It’s too much hassle.”

A joiner, who Stuff has agreed not to name, is in a similar situation. Owed about $130,000, he installed several new kitchens on credit for Garden City after Kala “begged” him to help him get the properties finished.

Adams doesn’t know what’s caused the company’s cash flow issues. But he believes clients’ progress payments have been used to help fund the purchase of other properties.

The builder is also concerned about the lifestyle the Tesla-driving Kalas are leading. Sanjeev Kala has turned up at sites sporting new shoes, gold chains, flashy watches and expensive-looking sunglasses, Adams said. He and other contractors were “pissed off” when they learned of the Rarotonga holiday.

“I think they got stuck in a dream of building themselves a mansion, they invested a lot into that instead of investing in jobs. When the money issues started they were just always chasing it.”

If he’d known about Kala’s criminal history, he said he would never have worked for Garden City.

Many homes Adams helped build were in Clonbunny Cl, Rolleston. Jupiter Bignotea’s is one of them.

Bignotea, 47, said Kala told him his three-bedroom house would be finished by September last year, but delays meant he didn’t move in until May.

And now, he’s dealing with issues and a code of compliance is yet to be issued for the property.

When Stuff visited his home last week, there was cracking in the lounge ceiling, floor vinyl was lifting and a light wasn’t working.

Bignotea, who met Kala through taekwondo, said he’d been chasing Garden City for weeks to try and resolve the issues.

After Stuff started making enquiries last week, the company acted quickly, meeting on site with him on Tuesday.

“This is meant to be our dream home, but it's just turned into a nightmare,” Bignotea said.

He said his insurance presumed the code of compliance had been issued, and worried that if there was a fire he might be liable and left with nothing.

Delays in being able to move in had cost him thousands in additional rent.

“It’s been hell. We just don’t want people to go through what we’re going through. It’s very stressful.”

Stuff has also spoken to other people who’ve experienced significant delays in their homes being built.

A man, who asked not to be named, bought a Wigram property in April 2021, and was told Garden City would have his new home built in a year. It’s still not finished.

“It’s absolutely ridiculous. We’re not sure what to do. It’s been a whirlwind of fake promises,” the man said.

Adams said Bignotea’s property was “a disaster from the start”.

There were issues with consents and sourcing building materials, he said. “We got behind and couldn’t catch up.”

In response to a series of questions from Stuff, Mehak Kala said she couldn’t understand why contractors were concerned, as “we are in contact with them on a regular basis”.

“We have worked with many contractors over the years and we have always paid them. We have worked with many homeowners and have always delivered the houses.”

She would not say how much money Garden City owed contractors and suppliers as “that’s commercially sensitive and we don’t see any need to give you that information”, but confirmed the business was in debt to Carters and had made arrangements to pay.

“We don’t believe the company has any financial issues. We pay all our subcontractors according to their work and invoicing schedule.”

Over the last few years, Garden City had “generated significant work” and used profits to expand the business, she said.

“We have not used [clients’] funds to fund other developments. We are aware of our working capacity and take necessary steps to maintain effective workflow. We do not cut corners as our subcontractors are responsible and so are we.”

Kala said her husband’s fraud conviction and gambling addiction were “ancient history” and any suggestion funds had been misappropriated were “baseless”.

She said the couple had worked hard and saved money to travel overseas. The trip to India was to see family after years of Covid restrictions.

Kala also said the couple had no plans to build a large house “at the moment”.

“We are focusing on our business.”

Kala said the company was currently working on nine houses and any delays with builds were “due to circumstances beyond our control”.

In Bignotea’s case, he requested “numerous” changes during construction which slowed the project.

“Minor issues” at the property would be fixed under warranty and Garden City would supply the necessary information to the Selwyn District Council so the code of compliance could be issued, she said.

“We have funds and enough resources to get funding. We continually analyse issues that arise in the course of business and take measures to avoid such issues arising in the future.”

Due to his fraud conviction, Sanjeev Kala could not be a director or involved in the management of a company until December 2021.

The Ministry of Innovation and Employment confirmed it received a complaint in November 2021 alleging Kala may have been involved in the management of Garden City Homes. That complaint was not substantiated.

Kala is a relative of disgraced former doctor Rakesh Chawdhry, who sexually abused more than ten patients.