John Edward Clancy: Liquidation of company he directed and owned and compliance issues

John Edward Clancy: Global Developments (NZ) Ltd (now called Derby Grey Ltd) of which Mr Clancy was founding director and owner (via his family trust of which he is sole trustee); was put into liquidation on 20 October 2014 with liabilities of about one million dollars according to the liquidator’s reports. On that same day he ceased being director, just two years and two months after he had been appointed sole director. Six days prior to his departure, Graham Hewer was appointed as director effective on 14 October 2014. He remained the sole director following the departure of Clancy, and remained so up until the day the company was put into liquidation.

On the same day Mr Hewer became a new director, 14 October 2014, the company’s accountant Richard Somerville of Walker Townsend Ltd, filed a document with the Companies Office recording that all the company’s shares held in a trust he had set up for Clancy, of which Clancy was the sole trustee, had been transferred to Mr Hewer.

Somerville recorded Mr Hewer’s residential address as 87 Byron Street, Sydenham. However, a simple check by Mr Somerville would have confirmed that this is not a residential address and as such cannot be used on records linked to Hewson’s role as director or as a shareholder. False information has been supplied to the Companies Office in breach of the Companies Act 1993.

Clancy’s failure to comply with the law with regard to accurately recording his residential address, is just one of the factors that has ensured that company creditors have found it impossible to contact the company and trace Clancy’s whereabouts. Adding to this confusion Clancy changed the company’s name to Derby Grey Ltd, effective 9 October 2014, just prior to appointing Hewer as director.

Somerville has consistently recorded Clancy’s residential address linked to the latter’s role as director and shareholder, as 64 Khyber Pass Road, Grafton, Auckland 1023 (first used by Clancy on his Director’s Consent Certificate and Shareholder Certificate both dated 13 August 2012). However, on 22 April 2013 Clancy filed a change to his ‘residential address’ to 19 Bennington Way, Wigram, Christchurch, 8042, New Zealand. The latter was retained as his “residential” address until the company was put into liquidation on 20 October 2014. However, this appears to be another deception as it is not recorded against his name for any of his other companies.

The latest liquidator’s report on Global Developments (NZ) (now Derby Grey) informs creditors the liquidators (Ecovis KGA) are investigating “the disposal of assets by the company shortly before their appointment, with particular emphasis on the value and consideration received for such disposition. The liquidators are continuing to review the actions of the former director (Clancy).”

Property records show Clancy and his trustee company, FJ40 Trustees Ltd bought a 2 hectare property in Clarkville in North Canterbury last year for $847,000. It is on the market.

John Edward Clancy: Debts pile up as company director can’t be found

John Edward Clancy: Today Stuff News (“Debts pile up as company director can’t be found”) reported on two Auckland-based, [Christchurch earthquake] “rebuild companies” that Mr Clancy currently directs: Hanguk Business Investments One Ltd (formerly called Global Renovations Canterbury Ltd), which according to its creditors owes thousands of dollars, and Global Renovations Ltd. The latter is referred to in the report as belonging to a group of about 30 companies Clancy directs, and is also involved in the “building house construction” industry.

A number of creditors – subcontractors and suppliers – are reported to be worried that the companies appears to have abandoned Christchurch and Clancy cannot be found or contacted. The accountant acting for all Clancy’s companies, Ponsonby/Auckland-based Richard Somerville of Walker Townsend Limited is reported as saying that he believes Clancy is overseas.

All these companies have a registered office address and service address listed on Companies Office records as Walker Townsend Ltd, Level 5, 64 Khyber Pass Rd, Grafton, Auckland, 1023, New Zealand. Richard Somerville, as “trustee shareholder” of companies Clancy directs, records his address as his office address at 64 Kyber Pass Rd (as above).

What Stuff News does not report:

  1. Mr Clancy has been in breach of the Companies Act 1993 for many years for failing to record his residential address correctly in Annual Returns and other documents filed with the Registrar of Companies. Companies Office records show that he resides at 64 Kyber Pass Rd, Auckland 1023, but this is not correct. This address is a non-residential property and is in fact the address of the offices of the company’s accountant Richard Somerville.
  2. Mr Clancy has breached the Act by providing a false residential address as a shareholder of companies he directs. Neither 64 Khyber Pass Road, Grafton, Auckland, 1023, New Zealand or 91 Kingsley Street, Sydenham, Christchurch, 8023 , New Zealand, which he uses on Companies Office records,  are residential addresses.
  3. Section 2 (part 5) of the Companies Act 1993 makes it clear that the address of a legal person who is a director and/or shareholder of a company must be recorded as his/her residential address (the address where he/she normally resides).

FJ40 Trustees Ltd, together with individual shareholder John [Edward] Clancy, is the joint owner of Global Renovations Canterbury. This ownership structure of FJ40 Trustees is that of a family trust (Note: trusts cannot by law be named as a shareholder in Company Office public records as they are not a “legal person”) with Clancy as its sole trustee (ALL trustees of a Trust, by law, must be named on Company Office public records).

FJ40 Trustees is registered with IRD as a business operating as a “trustee service” and it was set up by Clancy’s accountant Richard Somerville. Somerville holds the only share in the company FJ40 Services, holding it on behalf of  an unnamed beneficiary or beneficiaries (all beneficiaries would have to be named in the Trust Deed).

The Stuff report refers to FJ40 Trustee as “Clancy’s trustee company”. It states:

Property records show Clancy and his trustee company, FJ40 Trustees Ltd, bought a 2 hectare lifestyle property in Clarkville in North Canterbury last year for $847,000. It is on the market.” [Emphasis added]

Creditors of Mr Clancey’s companies, including the IRD, will no doubt be seeking more information from Mr Somerville as to his relationship with the companies Mr Clancy directs and the nature of Mr Clancy’s relationship to the Trustee company and its “owner”/beneficiaries.

References:

Debts pile up as company director can’t be found”. Story by Martin Van Baynen. Published 18 July 2015.

http://www.stuff.co.nz/business/69990004/debts-pile-up-as-company-director-cant-be-found

Companies Office website: www.companies.govt.nz

Listing false residential address – Ex BBFC film censor jailed for false expense claims

Former Conservative peer Lord Taylor of Warwick has been jailed for 12 months for falsely claiming £ 11,277 in parliamentary expenses. He claimed for travel between a home he used in Oxford and Westminster, as well for overnight stays in London.

Taylor listed his main residence as a home in Oxford, which was owned by his nephew, while he actually lived in a flat in Ealing, west London. He said he had made the false claims in lieu of a salary , and had been acting on colleagues’ advice.

[Note: In New Zealand Company directors who provide false residential addresses in their Annual Returns are more than likely to be making false travel expense claims in their tax returns.].

Jailing him, judge Mr Justice Saunders said the expenses scandal had left an indelible stain on Parliament .

Taylor was a former vice-president of the British Board of Film Classification serving from 1998 until 2000. He was appointed during moral times when the Government were keeping a close eye on BBFC presidential appointments….

Based on article: http://www.bbc.com/news/uk-politics-13599624

Secondary Source: Tendency to Deprave and Corrupt

http://www.censorwatch.co.uk/cw0511.htm#A_Tendency_to_Deprave_and_Corrupt_4552

Society awaits reply from Minister Hon. Paul Goldsmith to questions re Companies Act 1993

Minister Paul Goldsmith, as of today, 6 July 2015, has not answered questions put to him from the Society (emailed to his office on 5 June 2015 and acknowledged as received) relating to the Companies Act 1993. We have been assured today by his office staff that he is very diligently working on a reply which we will be publish on our website, when and if it is received.

COPY OF QUESTIONS RAISED WITH MINISTER

Attention

Hon. Paul Goldsmith

Minister of Commerce and Consumer Affairs

p.goldsmith@ministers.govt.nz

5 June 2015

Dear Sir,

The Companies Act 1993 states in section 2 (“Interpretation”):

“A reference in this Act to an ADDRESS means (a) in relation to an individual, the full ADDRESS of the place where that person USUALLY LIVES.” [Emphasis added in capitals].

Under the Act all company directors are currently required to disclose their full “residential addresses” [where they reside and can be contacted by the Office] and these are included within the company records in the Annual Reports filed each year, available for public scrutiny on the Companies Office website. If their address changes they have a statutory duty to update their address on the website (able to be done online) by notifying the Registrar within the prescribed time frame. Not to do so is an offence and a number of directors have been prosecuted for such breaches of the Act.

Following the recent amendments to the Act which took effect on 1 May 2015; a time-frame for implementation of changes has been set, such that by 28 October 2015:

“All New Zealand companies will be required to have at least one director that either lives in New Zealand, or lives in Australia and is a director of a company incorporated in Australia.”

Our Society has a number of questions we seek urgent answers to:

  1. Under the current law is it lawful for a sole company director to record on his company’s Annual Return filed, a full address for the place where he claims he lives, which is knowingly incorrect, e.g. an address where he does NOT live?
  2. If it is lawful to do so, why is it, i,e. on what legal basis is he allowed to use an address that is not where he lives?
  3. If it is not lawful, then why not (please cite relevant section(s) of Act) and please inform us what is the legal consequence under the Act of knowingly submitting such incorrect information?
  4. If a company director holds both NZ and US citizenship and is both sole director and sole shareholder of a good number of NZ incorporated companies, what addresses is he required to file with the Companies Office in the Annual Returns of his companies – his US residential address OR an address in NZ where he might stay from time to time on his visits here?
  5. Is it lawful for such a person as described in Q 4 above, to use a Bed and Breakfast establishment owned by one of his companies, as the address where he lives, if he spends most of each year living in the US?

Yours

Society for Promotion of Community Standards Inc.

[Contact: spcs.org@gmail.com. P.O. Box 13-683 Johnsonville, Wellington 640].

New Zealand’s history of Ponzi schemers

In five of the last nine years, ponzi schemers have been banged up in jail as a result of their nefarious actions.

Between 1991 to 2012, New Zealand had at least one active Ponzi schemer at work at all times, most under the old Securities Commission, which was ineffectual and was swept away to be replaced by the Financial Markets Authority (FMA).

The FMA can’t guarantee there are no ponzi schemes operating as you read this.

That means being on the alert when you choose who to invest with, but the large numbers of investors who have been caught indicate it is easy to fall prey to sharp Ponzi schemes, which the regulator says pop up more frequently in low interest rate times.

The word Ponzi comes from Italian Charles Ponzi, whose 1920s investment scheme in America forever joined his name to faux investment schemes where one depositors’ money is paid as returns to another with the pretence that it was legitimately earned from investing.

For full article by Rob Stock published 2 July 2015 – go to:

http://www.stuff.co.nz/business/money/69819286/new-zealands-history-of-ponzi-schemers