Grand Theft Auto IV (also known as GTA 4) – a computer game formatted for PlayStation 3 and Xbox 360 – was launched on April 29, 2008 and sold nearly 2.9 million copies in the United States in its first five days.1 The game – made by Two’s Rockstar studio – with first-week worldwide sales forecast of up to $US400 million, was submitted to the Office of Film and Literature Classification (OFLC) on the 4th of February 2008 by the Film and Video Labelling Body Inc (FVLB).
The computer game’s distributor, the applicant to the FVLB, recorded on the application form, its identity as “TAKE 2 INTERACTIVE”. All other details relating to the company were deleted from the form by the Chief Censor, Bill Hastings, when he provided the application form to the Society, in response to its Official Information Request (OIR). The applicant’s contact person, return street address for the publication and contact telephone number, were all deleted.
The Society Investigates……..
The Society has been calling for the Grand Theft Auto game series to be banned since an earlier version was released onto the NZ market (See article by Fran Tyler “Crime-Promoting Game Sells Fast, Dominion Post 17/11/02, A12). Lack of disclosure from the Chief Censor’s Office regarding the details of the game’s version 4 distributor, has prompted the Society to do some quick research on the company ………
Here are some initial findings.
The full Company name of the New Zealand distributor of the Grand Theft Auto IV is TAKE 2 INTERACTIVE SOFTWARE PTY LTD, New Zealand Branch. It is a branch of its overseas controlling company, one that is incorporated in Australia with an official name of TAKE 2 INTERACTIVE SOFTWARE PTY LTD. The latter is controlled by a Swiss Company that is itself controlled by the parent company based in the US (see details in Appendix below).
The New Zealand Companies Website (www.companies.govt.nz) indicates that the NZ distributor of Grand Theft Auto IV was registered as a Company (No. 1100292). in New Zealand on the 6th of November 2000 and its principal place of business is listed as Unit M, 86 Bush Road, Albany, Auckland (website record entry dated 23 May 2007). The person authorised to “accept service” in New Zealand on behalf of the Australian-based company, is Mr John Gray C/- Ross Melville PKF, Level 5. 50 Anzac Ave, Auckland 1010. The current NZ Branch Directors are listed as Michael Chow of 18 Headland Road, Castle Cove NSW 2069, Australia and Daniel Emerson, 109 Puritan Drive, Port Chester NY 10573, United States and by law must also be directors of the Australian controlling company. Both were appointed as directors on the 8th of September 2007 on the same day that former Company directors Emmanuel Bohlock and James Ellingford resigned.
On the 30th of March 2007, Bohlock and Ellingford and the Company’s auditor, Margaget van Aanholt, signed the NZ Branch 2006 Financial Statements (covering the period 1 November 2005 to 31 August 2006). However, it was not until eight months later, on the 26th of November 2007, that the documents were finally filed with the Companies Office. The directors were obligated under the Financial Reporting Act 1993 to file them within 20 working days of signing them off. However, they were filed almost 7 months after the due date and two months AFTER Bohlock and Ellingford had resigned as directors on September 8th 2007 – replaced by new directors, Michael Chow and Daniel Emerson, were appointed.
Section 10 of the Financial Reporting Act 1993 required that the directors file these documents NO LATER than 5 months and 20 working days after the balance date of 31st October 2006 – that is NO LATER than the 3rd of May 2006 (see ref. 3).
In a letter to the Society dated 5 May 2008, in response to the Society’s OIR concerning Grand Theft Auto IV, the Chief Censor wrote:
“The Film and Video Labelling Body Inc also submitted to the Classification Office [to accompany the publication Grand Theft Auto IV] a copy of the submission made by the game’s Australian applicant to the Australian Government Classification Board. This submission relates “to the classification of this publication”. This submission is however marked “confidential” and contains commercially valuable information. Under section 18(a) of the Official Information Act 1882, I therefore refuse your request because the information requested is subject to an obligation of confidence where the making available of the information would be likely to prejudice the supply of similar information, or information from the same source, and it is in the public interest that the information should continue to be supplied, and because the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied the information. [Emphasis added]
“You have the right, by way of complaint to an Ombudsman under section 28(3) of the Official Information Act 1982 to seek an investigation and review of this refusal.”
The Society has lodged a formal complaint with the Office of the Ombudsman over the refusal of Mr Bill Hastings to release this information to the Society. It contends that it is in the “public interest” for the submission on Grand Theft Auto IV received by the OFLC from the game’s Australian applicant to the Australian Government Classification Board, be released. Furthermore, it contends that any genuine commercially sensitive information, such as sales figures projections etc, could have easily been deleted by the applicant, prior to its release of the submission to the SPCS. Furthermore, it is asking that the Ombudsman investigate the nature of the so-called confidentiality agreement that Mr Hastings claims he has entered into with the game’s Australian applicant (and/or the New Zealand or Australian distributor).
The Society asks: Why is TAKE 2 INTERACTIVE so sensitive about the release of its New Zealand contact details, in view of the fact that Grand Theft Auto IV is advertised as being advertised in NZ as the Number 1 selling computer game in the world and the “coolest game ever made”.
Why would the Company distributing such a popular and commercially successful game request that Chief Censor Bill Hastings and Bill Hood, Executive Secretary of the FVLB, withhold its contact details from the SPCS?
As noted, TAKE INTERACTIVE last filed it audited Financial Statements with the New Zealand Companies Office on 26 November 2007 – LATE – and these were for the financial year 1 November 2005 to 31 October 2006. Its audited Financial Statements for the year ending 31 October 2007, that were required to be filed with the Companies Office NO LATER THAN the 29th of April 2007, have not yet been filed. Again Company Directors have a legal obligation to have these accounts filed by the due date (see ref. 3).
Audited Financial Accounts that have been filed show that that the New Zealand Branch of TAKE 2 INTERACTIVE had a sales revenue in the 2005/2006 financial year of $5,350.639 that together with interest revenue of $1,617, gave it a total yearly operating revenue of $5,352,256. Taking account of annual operating expenses of $5,287,737, this gave it an operating surplus before income tax of $64,519. Subtracting income tax of $27,797, gave it an operating surplus of $36,722.
The balance of the account at the beginning the year (1/11/05) was $237,209 and this amount combined with the net profit for 2006 (or operating surplus) of $36,722, gave an end of year (31/10/06) balance of the accounts of $273,931 (the latter figure derived from net profit of $36,722 + balance of $237,209 as at 1/11/05)
The only financial disclosures relating to the annual operating expenses of $5,352,256 that are provided in the 2005/2006 Financial Accounts are given in note 3: $29,023 (Cost of offering credit: bad and doubtful debts), $6,384 (Fees for audit services) and fees for taxation services ($13,186). The total amounts to only $48,593 – a mere 0.96% of total operating expenses. It appears that the NZ Branch directors of Take 2 Interactive have cited Section 211(3) of the Companies Act 1993 to justify the absence of financial disclosure with respect to $5,303,663 of operating costs. ALL Shareholders would have had to have formally agreed with such omissions from the Financial Statements for them to be legal under the Act. The Companies Office told the SPCS it was unable to disclose any information concerning this lack of financial disclosure.
http://www.companies.govt.nz/scanned-images/71/BC10054448471.pdf
Goods amounting to $4,568.795 (2005: $5,689,297) were purchased from the New Zealand Branch’s controlling company based in Australia – Take 2 International Software Pty Limited – during the financial year ending 31 October 2006. As that balance date the Branch owed the controlling company $806,383 for goods purchased (2005:$1,080,346).
The gross profit from sales by the Australian controlling company for the year ending 31 October 2006 was $10,453,067. Its net assets are recorded as $5,927,590 and total liabilities are $7,646,429. The total receipts from customers was $38,567,136 and the profits attributable to the entity after providing for income tax was $949,282.
These results contained in the Financial Statements for 2005/2006 were signed off by one director, Emmanuel Bohlock, and the auditor, Margaret van Aanhold, on the 1st of June 20007 and then filed with the NZ Companies Office on 26 November 2007, two months after Bohlock and fellow-director James Ellingford had resigned. Bohlock signed the Director’s report on behalf of his fellow directors Ellingford and Ashish Solanki. “Key Management Personnel Compensation” is given as $868,657 (2005:$827,868).
Appendix
A “Summary of Significant Accounting Policies” contains Note 10 “Party Related Disclosures” to the NZ Branch’s Financial Accounts (2006), states:
“The controlling company of Take 2 Interactive Software Pty Limited, New Zealand Branch, is Take 2 Interactive Software Pty Ltd, a company incorporated in Australia.
“The immediate controlling company of Take 2 Interactive Software Pty Limited is Take-Two International SA, a company incorporated in Switzerland.
“The ultimate controlling company of Take 2 Interactive Software Pty Limited is Take-Two Interactive Software Inc. a company incorporated in the United States of America.”
Note 1 states:
“The [New Zealand] Branch is a qualifying entity within the Framework of Differential Reporting. The Branch qualifies on the basis that it is not publicly accountable and Take 2 Interactive Software Pty Limited is a wholly owned subsidiary of Take-Two International SA, (Company incorporated in Switzerland).”
References
1. US game sales rise 47PC in April on GTA4. ReutersFriday, 16 May 2008
http://www.stuff.co.nz/4550995a28.html
2. Grand Theft Auto hailed as ‘masteroiece’ Reuters 29 April 2008.
http://www.stuff.co.nz/4501898a1860.html
3. Section 19 (3) of the Financial Reporting Act 1993 states:
The directors of every company to which this section applies [Overseas Companies] must—
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(a) ensure that, within 20 working days after the financial statements of the company and any group financial statements in relation to a group comprising that company and its subsidiaries are required to be signed, copies of those statements, together with a copy of the auditor’s report on those statements, are delivered to the Registrar for registration; and
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(b) ensure that the company pays to the Registrar the prescribed registration fee at the same time.
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