Companies regulators say they will make a statement next week on allegations New Zealand company registration processes are lax or poorly enforced."Some information will be put out next week...on issues about the Companies Office and questions which
Companies regulators say they will make a statement next week on allegations New Zealand company registration processes are lax or poorly enforced.
"Some information will be put out next week...on issues about the Companies Office and questions which have been raised lately," a spokeswoman for the office at the Ministry of Economic Development said yesterday.
"We just want to hold off at this point. We're sort of wanting to have a chance to have a talk to the Minister (Simon Power) about this."
She declined comment in the meantime on claims that problems with anti-money laundering legislation have been shown up by the case of SP Trading Ltd -- part of a web of hundreds of companies registered to 369 Queen St, Auckland, and created by Geoffrey Taylor's GT Holdings of Vanuatu -- which was used to charter a plane last month found carrying 35 tonnes of North Korean arms and seized at Bangkok airport, Thailand.
But the spokeswoman confirmed that if it was proven SP Trading had given the office at 369 Queen Street as the residential address for the woman incorporating the company, that would be regarded as a false statement and a breach of section 373 of the Companies Act.
Mr Power has faced a series of calls for tightening up on self-certification requirements of company registration since the weapons shipment was intercepted in Bangkok, but the Labour Party warned against "kneejerk reactions" to company registration requirements.
Labour's Commerce spokesperson, Lianne Dalziel, said some commentators had called for proof of identity and address for every director of every company, when the concerns had actually been about people falsely supplying registered office details without the authority of the business concerned.
"There is enormous risk of unintended consequences when such proposals are made without a thorough assessment of the real issues," she said.
It was timely for the Government to put such concerns on their reform agenda, but some potential solutions might do more harm than good.
"If the issue is the use of fraudulent registered offices, then why not require the business located at the Registered Office to certify its agreement to be the Registered Office?" she said.
Or overseas companies registering in New Zealand could be required to have a registered agent accountable for the bona fides of the company's principals.
Roger Wallis, a partner in law firm Chapman Tripp, said the existing rules simply needed to be enforced.
SP Trading Ltd and a woman director, Lu Zhang, had clearly breached the Companies Act by listing the wrong address as her residence, and the company had failed to file audited financial statements within five months of the balance date.
A Wellington accountant, Robert Walker has complained that it was too easy to form companies, and resulting problems could damage overseas perceptions of other New Zealand companies.
Mr Walker -- who is also a liquidator -- said the company registration system had allowed the leaky building crisis to blow out to billions of dollars. Each home was built under a separate limited liability company registration. This meant homeowners with problems were left to sue companies with a registered capital of $100.
Lobby group Business NZ has said the calls to toughen the rules on registering new companies were an overreaction.
Business NZ chief executive Phil O'Reilly urged caution in introducing an "excessive compliance burden" to current regulations.
The debate was triggered by the December 11 discovery that an Ilyushin-76 cargo plane, registered as flight 4L-AWA, was found to be carrying $US18 million ($NZ24.96m) worth of rocket-propelled grenades, and missile and rocket launchers -- listed as oil drilling equipment.
