Officials are investigating the use of business leaders' residential property in east Auckland to house up to 30 migrant workers
Tenants have claimed there were initially no bedroom smoke alarms and sometimes no electricity at the big five-bedroom house they were crammed into in the affluent suburb of Shamrock Park.
Auckland Council and MBIE Tenancy Services both kicked off investigations in June, after complaints about the house being used unlawfully as a migrant workers' hostel.
The 553 square metre house, with a rateable value of $2.97 million, is owned by a couple who are among the biggest donors to the National Party.
MK Trustee's owners and directors are Geumsoon Shim (known as Jean) and Lian Seng Buen, who also own and operate companies including Buen Holdings and health exporter Alpha Laboratories. The latter is a contract manufacturer of oral dose supplements, employing 260 people at its Crooks Rd headquarters – which were opened by former prime minister John Key in 2014.
THE NEWSROOM INTERVIEW: * Donors Jean Shim and Lian Seng Buen say migrant hostels inquiry has been widened to other houses
This week in an interview with Newsroom, Jean Shim says she didn't know their house was being sublet as a boarding house, until she received the abatement notice from council. The couple moved quickly to resolve the problem, she says.
Through their companies, the pair are among the National Party's biggest donors. A party spokesperson confirmed: "The companies you mention have donated to the National Party on occasion."
A source says the National Party's interactions with Alpha Labs have typically been through Jean Shim. "Buen’s English was not strong and he was always quite quiet."
Ministers in the Key-English Government visited their head office, and a source said the couple had attended several of the party's invitation-only events like business lunches, and Lunar New Year celebrations.
Unaware of the political and business connections, the NZ Herald reported in May that Tenancy Services and Auckland Council were looking into claims that a residential house in East Auckland, owned by the couple, was being used to house about 30 people – mainly migrants holding Working Holiday visas.
But despite that article, the party spokesperson said: "We were unaware of the issue you’ve raised relating to the individuals involved in these companies, but note your point that one investigation has closed and another is ongoing and it would be inappropriate for us to comment on that."
Nor is this the first time they have faced questions about their treatment of workers: in 2016, the Employment Relations Authority ordered Alpha Laboratories to pay a former employee $44,000 for humiliation and loss of salary, after she was refused an hour and a half off to visit her dying mother, then dismissed.
The couple have doubled down on their donations to National in the past few elections. Buen Holdings gave $200,000 to National last month – the party's second biggest election year donation. Alpha Laboratories donated $50,400 in 2014 and $100,000 in 2017.
It's not clear whether they also donated to National leader Christopher Luxon's campaign at the last election, as his $73,000 in campaign contributions was routed through National's Botany electorate organisation.
READ MORE: * The latest charts and big donations data on Election 2023 * Donations cases back to haunt National, NZ First in election year
But ahead of the campaign the party did post photos on its local Facebook page of Luxon visiting Alpha Laboratories and posing with the owners, a month after he was named National's candidate for the electorate.
Before the couple made their big donation, the Herald interviewed a woman who had responded to an advertisement offering “bed space for rent” at the property.
She was told the home had 27 people living in it. Instead of renting out rooms, people paid $160 per bed and for that price, the woman was told she would be sharing a room with three others.
A tenant said residents did not have direct dealings with the landlord but only with a representative, who is Malaysian. The day after the fatal fire at Wellington’s Loafers Lodge, the tenant said workers were sent to install smoke alarms in the bedrooms at the property.
Talking to Newsroom, neighbours said there were people coming and going, night and day, from the property in the once-exclusive Del Mar Court cul de sac. Their cars filled up the bricked yard of the house, and spilled out onto the road.
One neighbour complained to them about the risk they posed to her young daughters, driving the wrong way down the road.
A tenant told her it was difficult, with tenants coming and going. At one point the electricity was cut off, he told her, and so they were paying $500-a-day to rent a power generator.
Newsroom has learned that soon after the Herald article was published, the owners began moving the tenants out of the property.
Adrian Wilson, compliance manager at Auckland Council, says after receiving a complaint, Auckland Council compliance officers conducted a site visit on June 17.
"During this site visit, the officers confirmed that the property had been operated as a boarding house," he says. "An abatement notice was issued to cease operation of the boarding house, as well as a notice to fix for the unconsented change of use of the property.
When they visited, they found smoke detectors in each room and in the common areas. A power generator was not in use.
Council officers returned on July 3 – just a week before the couple's big donation to the National Party.
They discovered the number of tenants on the property had been reduced to three, and that those tenants would also be vacating the property in the next week. "As the property owner has complied with the abatement notices they have been cancelled," Wilson says.
Earlier this month, neighbours saw beds being moved out of the property, to house the workers elsewhere. The property – which is still officially listed as Shim and Buen's home address – now sits empty, with a padlock on the gate.
At MBIE Tenancy Services, however, investigations are proceeding. Its compliance and investigation team enforces the the Residential Tenancies Act, including breaches that cause the condition of the premises to be a significant risk to the health or safety of vulnerable people or groups of people; serious or persistent breaches by the landlord; and actions by the landlord that risk undermining public confidence in the administration of tenancy law.
Brett Wilson, the national manager of compliance and investigation, confirms Tenancy Services is investigating the property. But as the investigation is ongoing, he says the ministry can't comment on its preliminary findings.
This is to avoid prejudicing the remainder of the investigation or impacting on the enforcement outcome, he says.
"As investigations progress, the tenancy compliance and investigation team will provide guidance and instruction to enable landlords to work toward compliance with the Residential Tenancies Act," he adds.
"Where ongoing breaches are identified, the team uses several interventions and enforcement tools to ensure landlords comply with their obligations under the Act. This includes holding landlords to account and requiring them to change their behaviour where necessary."
Newsroom has emailed Jean Shim and Lian Seng Buen, and visited the Alpha Laboratories and Buen Group headquarters, across the road from each other in East Tāmaki. Shim indicates she will consider this article and respond as necessary.
Previously, Shim has told the trade publication NZ Manufacturer of her firm's global trade ambitions. "We feel there are still a lot of opportunities in export markets," she said. "We are very focused on catching those export opportunities."
She wanted to support other New Zealand exporters, too. "We think that competition and freedom of choice for the consumer is beneficial. We are here to provide more choices. We want to set a benchmark standard, not just so we can think about competitors, but focus more on trying to sustain the growth in the market for the future," she said.
"We have a very good environment and great work ethic here in New Zealand, it would be good to raise more awareness of New Zealand exporters overseas."
The $200,000 donation to the National Party last month was signed off by campaign manager Jo de Joux, Electoral Commission records show.
Newsroom asked the National Party when Luxon and the party had become aware of the allegations against his Botany constituents and donors, the party's view of the unlawful operation of a boarding house, and what they had done in response.
Citing the ongoing Tenancy Services compliance investigation, the party declined to answer those questions, or whether the party would be returning the $350,000 in donations from the pair.
