FORMAL COMPLAINT TO REGISTRAR OF COMPANIES:
RE: Company Directors David Bruce Crow and Stephen (Steve) Peter Crow
COPY OF CORRESPONDENCE
Society for Promotion of Community Standards Inc.
P.O. Box 13-683 Johnsonville, 6440
Attention: Mr Neville Harris, Registrar of Companies
Ministry of Economic Development
Private Bag 92061
Victoria Street West
Auckland 1142
c.c. Mr Peter Weir, Legal Team, Companies Office, Commerce Minister Hon. Simon Power, Ms Annelies McClure, Manager Overseas Investment Office, LINZ and other interested parties
19 January 2010
Introduction
Steve Crow has directed a significant number of companies that have either been placed in liquidation voluntarily due to insolvency, or forced into liquidation through the Court action taken by creditor(s). Four companies directed by Crow are currently in liquidation (Z4K74D Ltd; Malibu Media Ltd, Eden Media Ltd and Les Obstacles de L’Amour Ltd). All these companies are involved in the promotion of hardcore pornography industry and are owned by CVC Group Ltd, which is co-directed by Steve Crow and John Malcolm Carr.
David Crow, Steve’s brother, ran a building company, Buildwise Limited (formerly Crow Construction Ltd. Co. No. 714048 Incorporated 9/02/96), which was placed in liquidation on 3 July 2009. He was appointed co-director on 9/02/96 and when his father who founded of the company died on 19/07/08, David became the sole director. The Second Report by the Liquidator on the failed company is due out on 31 January 2010. The Taranaki Daily News has reported that it owes 57 creditors “several hundred thousand dollars”.
435 Devon Limited (Co. No. 1951732. Incorp. 11/06/07)
This company was incorporated on 11 June 2007 with the Consent and Certificate of Director of Proposed Company submitted to the Companies Office on that date by David Bruce Crow of 419 Bedford Road, Inglewood 4386. The form records that it was completed by David Crow P.O. Box 193 Inglewood 4347 Tel. +6421-460551.
However, no Consent of Shareholder or Shareholders Forms were ever submitted to the Companies Office as is required by law. No such documents are present on the Companies website. The Companies Office have confirmed that David Crow was required by law to submit four signed shareholder consent forms including one from NKS Trustees Limited and his wife Carolyn Rose Crow.
Failure to submit these requisite documents is a criminal offence on the part of company director David Bruce Crow who has proceeded to issue and allocate close on ten thousand company shares, appoint his brother Steve as director on 25 February 2008, and sign a sale and purchase agreement for the company on the same day involving a $1.9 million property in New Plymouth – the RSA building on 435 Devon Street East. The Crow bothers as company directors raised a $395,000 first mortgage with PMIT Nominees Ltd to purchase the property on 21 November 2008 (settlement day) and their company entered into a legally binding confidential financial arrangement with the former RSA owners who have left a large amount of equity – about $1,577,000 – in the property as a second mortgage @ 6% interest (Source: NPRSA Society’s Financial Statement Year ending 30/06/09).
In his application to incorporate the company registered on 11 June 2007, David Crow records the total number of company shares as just 1 and yet he lists 99 held by NKS Trustees Ltd/David & Carolyn Crow and 1 by himself. The total is clearly not 1. In a Particulars of Shareholding he registered on 9 April 2008, 10 months later, David Crow recorded that the total company shares changed from 1 to 100. The June 07 and April 08 records would appear to be contradictory. The Registrar or his officials must examine the share register to ascertain the facts.
To recap: It is significant that on 25 February 2008 the sale and purchase agreement was signed between the New Plymouth & Districts’ Returned and Services’ Association Incorporated – the owners of 435 Devon Street, and 435 Devon Limited – the current proprietor. Although Steve Crow affirms that he was appointed as Director on this day, he could not act in any formal/official capacity as director on this day because his Consent Certificate had not as yet been lodged with the Registrar.
How Brother Steve Crow was welcomed as new director – and destined to have controlling ownership of 435 Devon Limited
Steve Crow of 57A Walmsley Road, Otahuhu, signed a Consent and certificate of Director form stating that he had been appointed director of 435 Devon Limited on 25 February 2008 and it was submitted by fax to the Companies Office at 12:00 PM on 30 April 2008. It generated a Particulars of Directors online entry at 12:02:02 PM – “Updated Director Details” recording his appointment but with no effective date entered. Minutes earlier at 11:55:41 David Crow submitted the Online Annual Return for the company which recorded himself as Director and Stephen Peter Crow as “New appointment, not yet registered”.
However, section 159 (2)(d) of the Companies Act 1993 requires a director to register any change in directors (appointment or resignation) with the Registrar of Companies within 20 working days of the change. If indeed Stephen Peter Crow was appointed Director on 25 February 2008 as he claims, then David Crow, as company director, is liable under s. 159(3) of being charged with an offence and under s. 374(2) he could face a fine of up to $10,000 upon conviction of the offence.
The Company’s Meeting Minute book will need to be viewed by the Registrar and/or his official(s) to clarify the actual appointment date of Steve Crow as Director – because David Crow has committed an offence – if indeed the appointment was made of 25 February 2008. On the same day as David Crow filed the 2008 Annual Return – 30 April 2008 – in a Notice of Issues of Shares, David Crow records that 9,900 company shares were issued on 25 February 2008. However, section 43 of the Companies Act 1993 required David Crow to register this significant share issue within 10 working days of issue with the Registrar. David Crow broke the law yet again and under s. 374(2) is liable to pay a fine up to but not exceeding $10,000, if convicted. These 9,900 shares issued were allocated to the share parcel held by David & Carolyn Crow/NKS Trustees Limited, boosting the parcel size from 99 to 9,999 shares (see Particulars of shareholding registered by David Crow on 30/04/08).
To Review and Summarise: The issuing of the 9,900 shares by the company occurred on the same day that Steve Crow was purportedly appointed as director: 25 February 2008. A Particulars of Shareholding entry by David Crow registered on 30 April 2008 confirms that this issue increased the shareholding of David & Carolyn Crow/NKS Trustees Limited from 99 to 9,999. However, s. 43 of the Companies Act 1993 required David Crow to register this issue within 10 working days of the issue. He broke the law in failing to do so and registering the issue almost two months after the issue.
At 11.55.04 on 30 April 2008 David Crow recorded that of the 9,999 shares held by NKS Trustees Limited/David & Carolyn Crow as of issue date 25 February 2008; 4,999 were retained by David/Carolyn/NKS and 5,000 transferred to HWGA Company Limited, a company directed by his brother Stephen Crow. When exactly this transfer occurred is not evident from the online entry. One would need to check the company’s share register to determine the transfer date.
The Society contends that the Registrar of Companies should thoroughly examine all of these share transfers and listings as recorded in the company’s share register, in the light of four facts:
(1) No Consent of Shareholder or Shareholders was ever submitted by David Crow to the Companies Office when the company was incorporated on 11 June 2007 or since that time.
(2) The registration of Steve Crow’s appointment as director by David Crow was first registered on 30 April 2008, almost one month AFTER the 20 working day time limit.
(3) The issuing and transfer of a large parcel of shares were first registered by David Crow well after the 10 working day time limit prescribed in law.
(4) David Crow submitted the company’s online 2008 Annual Return on 30 April 2008 and it records the shareholding as 5,000 shares (HWGA Company Limited), 4,999 shares (David and Carolyn Crow/NKS Trustees Limited) and 1 share (David Crow).
Steve Crow resigned as director of 435 Devon Limited on 12 November 2008 and this change was registered online by David Crow on 17 November 2008. On 17 December 2008 in a Particulars of Shareholding on line entry David Crow recorded that the 5,000 shares held by HWGA Co. Ltd, which Steve Crow directed, were transferred to Steve Crow. He also records that of the 4,999 shares held by himself/his wife/NK Trustees Ltd and one he held personally – all 5,000 in total – were reallocated to him and his wife (Carolyn 4,000; David 1,000).
Steve Crow’s short-lived entry onto the stage as co-director of 435 Devon Limited, enabled him, through the agency of HWGA Co Ltd of which he was a director, to acquire a controlling ownership of 435 Devon Limited – a company which has no formal documents lodged as to its original and lawful shareholders. On 25 February 2008, the day Steve Crow was appointed director, David Crow signed the sale and purchase agreement and the 435 Devon Street East property was purchased for about $1.9 million, – all of it, it would appear, money borrowed by the Crow’s company. The $375,000 first mortgage was secured by 435 Devon Limited and the property title was transferred to 435 Devon Limited on settlement day, 21 November 2008. Steve Crow had resigned as director on 12 November 2008.
On 18 December 2008 in a Particulars of Shareholding Notice, David Crow recorded that 5,000 company shares owned by HWGA Co Ltd had been transferred to Steve Crow. If David Crow had complied with the law and we assume he did – i.e. the 10 working day notification – this transaction occurred some time between 4 December and 18 December 2008.
In the light of the serious offences highlighted, the Society believes that the Registrar of Companies should carefully examine the share register and the documentation filed with the Companies Office relating to 435 Devon Limited.
The Director of HWGA Co Ltd (Co. No. 661946 Incorp 5/01/95): Stephen (Steve) Peter Crow
The Adopted Constitution of the Company registered on 10 November 1995 states in section 3 (‘Directors”):
3.1 Unless otherwise determined by the company pursuant to the provisions of this constitution the number of Directors of the company shall not be less than 2 nor more than 4….. [Emphasis added]
3.3 Notwithstanding any other provisions of this constitution Stephen Peter Crow shall not be entitled to vote at any meeting of the Directors AND shall not be counted in the quorum of such meeting at which a decision is made to allocate or distribute either income or capital of any trust in which he is a beneficiary or potential beneficiary or is a member of a class of beneficiaries which is [sic] will or may be likely to benefit personally from any such allocation or distribution.” [Emphasis added]
Sometime sround 4 – 18 December 2008 a parcel of 5,000 shares owned by HWGA Co Ltd was transferred to its director Steve Crow, as noted above. The distribution of this capital must have involved an executive decision. At that time HWGA Co Ltd had two directors: Steve Crow and his ex-wife Gaylene Sharon Rogers, a Senior Sergeant with the Auckland Police. She resigned on 16 July 2009.
In the light of ss. 3-1 & 3.3 of the Constitution, if Steve Crow is a beneficiary or potential beneficiary of a trust linked to HWGA Co Ltd, then the question of any role he may have played in the decision process leading to the sale of these shares may be relevant.
The Society notified the NEU a number of times in writing last year pointing out that HWGA Company Limited has been operating in breach of its constitution since 16 July 2009, in having had only one Director since that time. The Society understands that this has been repeatedly brought to the attention of Mr Steve Crow who resolutely refuses to rectify the situation. He received a letter from Mr Shane Keohane, Manager of the National Enforcement Unit, Companies Office, dated 23 November 2009, pointing out a list of offences he had committed against the Companies Act 1993 and reminding him of his legal obligations.
Those matters that disqualify a person from holding the position of Director of a company are set out clearly on the Consent of Director Certificate which Steve Crow signed on 5 January 1995, just prior to HWGA Co. Ltd being registered. (Note: Nothing in the 23-page constitution document overrides what is stated in pars. 3.1 and 3.3 quoted above. No amendment has been made to the adopted constitution to negate these requirements).
One of the disqualification criteria listed on the Consent certificate Steve Crow signed is – anything linked to the actions of the Director that is in breach of the Constitution. By his very action of continuing to hold office as Director, Mr Steve Crow is in clear breach of the Constitution. He must resign forthwith as Director of HWGA Co Ltd or appoint another Director forthwith.
Society for Promotion of Community Standards Inc.
P.O. Box 13-683 Johnsonville, 6440
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