SPCS

SOCIETY FOR PROMOTION OF COMMUNITY STANDARDS INC.

NZ firm named in huge European scam

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New Zealand shell companies may have played a part in the biggest money-laundering operation in Eastern Europe.

A recent investigation by the Organised Crime and Corruption Reporting Project (OCCRP) exposed an enormous US$20 billion ($24.4 billion) transfer of dirty Russian funds, dubbed ”the Laundromat”.

The complex movement of cash, between 2010 and early this year, was allegedly facilitated by judges, well-connected officials, banks and offshore companies – including at least one New Zealand firm.

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Teens using cannabis – seven times more likely to commit suicide

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REGULAR cannabis use by teenagers can lead to an increased risk of suicide, greater use of illicit drugs and poor educational achievement a Christchurch study has revealed.

The study, published in medical journal The Lancet, showed daily cannabis users under the age of 17 were 60 per cent less likely to complete high school or attend university and were nearly seven times more likely to attempt suicide.

Daily users were 18 times more likely to become addicted to cannabis and eight times more likely to use other illicit drugs.

Researchers from three large, long-running studies in Christchurch and Melbourne, combined data to investigate the link between cannabis use in adolescence and outcomes later in life.

Professor David Fergusson, leader of the University of Otago’s Christchurch Health and Development Study, said the research was the largest single consistent study done on adolescent use of cannabis.

[The study, done by researchers in Australia and New Zealand, is a meta-analysis of three previous long-running studies that included nearly 4,000 participants.]. [Read more…]

Money laundering conviction for Natural Dairy duo involving HK$230m

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Two principals of a Hong Kong-based company that came close to buying New Zealand’s 22 Crafar farms have been convicted of laundering HK$230 million (NZ$36m).

The South China Morning Post said that a solicitor and the wife of a former director of listed company Natural Dairy (NZ) Holdings were convicted of the laundering.

Wu Wing-Kit, 57, was found guilty in the District Court of laundering HK$68.95m, while Ye Fang, 43, was convicted of dealing with the proceeds of indictable offences totalling HK$230m.

Natural Dairy (NZ) Holdings, known in New Zealand for its frontwoman, May Wang, had agreed to buy the Crafar family farms for NZ$375m.

Wu is Wang’s solicitor and Ye is the wife of Jack Chen, Wang’s business partner.

Prime Minister John Key at the time raised “concerns” about the sale of land to overseas interests.

In December 2010, acting on the recommendation of the Overseas Investment Office, the Government decided not to approve the application.

The rejection was based on the Government’s view that Natural Dairy were not fit persons.

The farms were later sold to another Chinese company, Shanghai Pengxin.

Full story: http://www.stuff.co.nz/business/10425426/Money-laundering-conviction-for-Natural-Dairy-duo

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Milk New Zealand Investment Ltd – British Virgin Islands/China link confirmed

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Following formal complaints by the Society …….. the Companies Office Registry Integrity Team has today ensured that a correction has been made online to the “registered office/principal place of business address” of the true shareholder of the NZ incorporated company, Milk New Zealand Holding Ltd [see email below – Appendix].  The latter’s sole shareholder is now recorded on the Companies Office website as

MILK NEW ZEALAND INVESTMENT LIMITED – Offshore Incorporations Centre, Road Town, Tortola , British Virgin Is. Country of Origin: China.

See: http://www.business.govt.nz/companies/app/ui/pages/companies/3883536/shareholdings

The previous incorrect registered office address – one based in Auckland – has been replaced by the correct one, an overseas address in the BVI. [Read more…]

Why do so many Chinese companies use the British Virgin Islands (BVI)?

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Extracts from: Why do so many Chinese companies use the British Virgin Islands (BVI)?

By Nicholas Shaxson  – author of Treasure Islands, a book about tax havens. He writes for the Tax Justice Network [TJN].

Article source: http://treasureislands.org/why-chinese-companies-flock-to-the-bvi/

Naomi Rovnick of the South China Morning Post published an excellent article in 2011 looking at the use by Chinese companies of British Virgin Islands (BVI) vehicles

She reported that ten percent of all “foreign” investment into China comes from the BVI, in fact – and growing explosively. Why so? Well, the reporter met quite a lot of obfuscation. The lawyers didn’t want to tell her; one Scottish corporate lawyer merely said ‘ask the Chinese clients’. But she extracted this telling quote from U.S. lawyer Steve Dickinson, which says it all!

“The reason for this strong link between China and the BVI is a very simple form of tax avoidance. If you take the money straight back into China you pay capital gains [or income] tax. If you leave it in the BVI, wait a while then send it back, it can be made to look to the authorities like it is a foreign investment, and you don’t pay tax on that.”

Mr Dickenson failed unfortunately to distinguish between “tax avoidance – which by definition involves getting around the law without actually breaking it, and tax evasion, which is a criminal activity. What he was is in fact talking about is Chinese interests pretending to be foreign – essentially escaping tax, illegally, through offshore deception. This is illegal. It is tax evasion.

Chinese interests pretending to be foreign – essentially escaping tax, illegally, through offshore deception. This is illegal. It is tax evasion. [Read more…]