The charges recently laid by the Companies Office against Lu Zhang for her alleged offences against s. 373 of the Companies Office Act 1993 – signals a new era of reform: a war against the abuse of the Companies Office register by unscrupulous company directors. By providing false residential and/or registered office addresses they seek to avoid full accountability to enforcement agencies, evade authorities and hide financial matters. Full credit to reporter Michael Field of Fairfax Media who broke the story about multiple shell companies operating out of an Auckland Queen Street building and their alleged links to illegal arms trafficking involving North Korea.
Criminal activities linked to prostitution and human trafficking, the international porn trade, drug and weapons trafficking, have all been linked to money laundering of the proceeds of crime.
International porn rings involving the trading and purchase of objectionable images of children and young persons, often involve money trails that can be tracked by the authorities across international borders. Company directors dealing with such material who hide behind bogus residential addresses will soon be flushed out as authorities get wise to such deception and when new laws of disclosure applying to all company directors are introduced to our parliament and enacted, as planned by Commerce Minister Hon Simon Power.
In early May this year the National Police Headquarters hosted a conference in Wellington that looked at the issues of money laundering and criminal connections within New Zealand, as well as overseas criminal links. It was not open to the public but a police spokesperson confirmed to the Society that one of the areas that was looked at in depth was the relationship between money laundering and crime, and shell companies.
Shell companies which have formed the basis of major ongoing investigations by Fairfax Media journalist Michael Field, whose widely-publicised articles have recently been published in the NZ Herald and Dominion Post, utilise “virtual offices” to shield company directors (and shareholders) from the scrutiny of enforcement agencies such as the National Enforcement Unit, the Serious Fraud Office and the IRD.
Company directors who are required by the Companies Act 1993 to register their bona fide residential addresses with the Companies Office are instead registering their names against bogus residential addresses such as “virtual offices”, derelict unoccupied buildings, and their out-of-date addresses.
The Organised and Financial Crimes Agency of New Zealand (OFCANZ) is being hampered in its job due to false and bogus entries on the New Zealand Companies website, many of which were going unchecked by the Registrar of Companies, despite numerous complaints. Enforcement agencies seeking to serve papers on company directors and/or obtain explanations for their dubious financial dealings involving the apparent flouting of the law, as reported, are finding it very difficult to make progress. Such agencies are being given the digitus impudicus by arrogant company directors, some of whom are insisting that the enforcement agencies deal with their lawyers rather than with them. Some of these directors who reside outside New Zealand, register themselves as New Zealand residents for tax purposes, when in fact their presence on New Zealand terra firma is as “virtual” as their bogus company offices and ‘residential addresses’.
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