The Society for Promotion of Community Standards Inc. (“SPCS”) is very alarmed that a well know New Zealand man has continued to ILLEGALLY direct a company since 17 April 2014, despite the Society having filed numerous complaints with the Registrar of the Ministry of Business, Innovation and Employment (MBIE), its Registry Integrity Team (RET) and the two successive Ministers responsible for the Ministry, warning them that he is PROHIBITED FROM MANAGING COMPANIES. He was banned for four years on 16 April 2010 as a result of actions taken by the National Enforcement Unit (NEU) of the Ministry of Economic Development (MED) in response to complaints laid by SPCS over the activities of this same company director, involving the liquidation of a number of his companies.
However, soon after the ban was put in place through the Court, SPCS became aware through its investigations that the “banned” director was continuing to openly flout the law by managing, and promoting a number of the companies he formally directed. Again SPCS laid complaints with the NEU (part of MED), which, after its own investigations were completed, decided to lay charges against the man under the Companies Act 1993 and again seek a conviction in the Court. On 24 May 2011 he was convicted in the District Court in Auckland of breaching the ban imposed on him by the Registrar, a criminal offence. He was ordered to pay a fine of $5,000 and pay court costs. It was information supplied to the MED in the course of a formal complaint by SPCS that led to the MED taking the matter to Court and achieving a successful prosecution. The maximum penalty that could have been applied under the Act was a $200,000 fine or a prison sentence (maximum five years).
One of the serious consequences of that conviction for the former director was that he became defined in law as a “PROHIBITED DIRECTOR FOR FIVE YEARS” – EFFECTIVE FROM 24 May 2011 to 24 May 2016 – under section 382 of the Companies Act 1993. He was prohibited for FIVE YEARS from being involved in any way with the management or promotion of any company. Despite this, and in open defiance of the Companies Act s. 382, he filed a Director’s certificate himself with MBIE on 17 April 2014, replacing his brother as director, who he had appointed to replace him when he had stepped down, at the time the four year ban was imposed on him in 2010.
Under s. 382 the PROHIBITED DIRECTOR can only become a Director of a company if he makes a successful application to the Registrar, and such other persons as the court thinks fit, may attend and be heard at the hearing of any application under this section.
THIS PROHIBITED DIRECTOR HAS YET TO MAKE AN APPLICATION TO THE REGISTRAR TO SEEK PERMISSION TO BE A DIRECTOR. IT WOULD APPEAR HE FACES A VERY SEVERE PENALTY ONCE MBIE INVESTIGATIONS ARE COMPLETED OVER HIS HISTORIC AND CONTINUING NON-C OMPLIANCE, AND AFTER SUBSEQUENT COURT ACTION, WHICH NO DOUBT WILL BE TAKEN AGAINST HIM, IS ALSO COMPLETED.
SECTION 382 OF THE COMPANIES ACT 1993 [Read more…]