SPCS

A top-level financial security task force investigating online company registration says some clients of those creating shell companies “represent a high risk of criminality”. With the risk of money laundering and terrorist financing high, urgent action was needed to protect New Zealand’s reputation, it said….

Yesterday Commerce Minister Simon Power said he would amend the Companies Act to tighten online registration…

See Full story: http://www.stuff.co.nz/dominion-post/national/4114329/Shell-firms-clients-high-criminal-risk

Neither Mr Power nor the task force cites operators by name, instead referring to them as “trust and company service providers” (TCSPs), who operate the registered company without disclosing who really owns and benefits from them.

The study says the risk of money laundering and terrorist financing “associated with company and trust formation is high”. It points to media reports of New Zealand companies implicated in attempts to bribe foreign officials or transport munitions.

Mr Power said the main change would be that companies would have to have either one New Zealand-resident director or a local agent. The Registrar of Companies would have expanded powers to deal with issues concerning the bona fides of directors and shareholders of companies. There would also be greater powers to take action where doubt existed about the accuracy of information about a company.

The Society which commenced research last year into four NZ registered companies – wholly owned at the time by a Florida-registered corporation – and all with links to the funding of the NZ pornography industry – discovered major issues of non-compliance and passed its concerns on to the Companies Office. As the Society accurately predicted – The National Enforcement Unit of the Companies Office has failed to make any direct contact with the sole company director since then, despite the fact that its mail has been sent to all of the director’s known addresses registered with the Companies Office. That director faces eight criminal charges in the Auckland District Court later this month relating to the four companies he directs. Several days after the publication of the Society’s December 2009 newsletter reporting on some of its concerns regarding the four companies, the US-based director transferred the ownership of all the four companies shares  from the Florida-registerd corporation into to his own name.

John Mills, Society President and a Company Director himself, says: “The Society is fully in favour of the proposed changes to the Companies Act signalled by the Minister of Commerce, Hon. Simon Power. Its concerns raised with the Companies Office over non-compliance involving four other companies in liquidation involving one other director, led to that director receiving a four-year banning order imposed by the NEU. Non-compliance by directors on basic matters such as their true and accurate residential addresses, their correct registered office addresses etc, are often symptomatic of offending and and/or failures in other areas” Mills said.  “Community standards must be upheld for the public good”, Mills added.
–

9 September 2010   Media Statement Minister of Commerce Hon. Simon Power

The Government is to tighten requirements around company directors and company registration, Commerce Minister Simon Power announced today. The main change will require all New Zealand companies to have either one New Zealand-resident director or a local agent. Mr Power says the measures are designed to shore up New Zealand’s company registration process against criminal activity from overseas.

http://www.nzherald.co.nz/government/news/article.cfm?c_id=49&objectid=10672170

[Read more…]