A business can pretend its director lives in a toy library or MP’s office because the government’s companies watchdog lacks teeth, a lobby group says.
The Society for Promotion of Community Standards made a formal complaint to the Companies Office on Monday in the wake of a Dominion Post report on on Masterton photographer Jade Cvetkov [link below] paying for a camera lens which never arrived, losing more than $3000 to camera accessory importer Pro1Digital Ltd.
“This story highlights the shambolic situation with Companies Office records,” said the Society’s executive director David Lane.
Pro1Digital went into liquidation on May 20 owing Inland Revenue and customers, including Cvetkov, tens of thousands of dollars. But according to internet domain records, a month earlier its director and sole shareholder Roy Li set up another website selling the same products, called sinotech.co.nz.
Companies Office records show a business called Sinotech Ltd was incorporated on May 11. Despite a legal requirement that companies register a director’s residential address, sole shareholder and co-director Shih Chuang Li used an address which is clearly non-residential – the Johnsonville Community Centre.
The company listed the same Johnsonville address, Level 1, 3 Frankmoore Avenue, as its registered office address.
Offices at that address belong to MP Peter Dunne’s electorate office, a Citizens Advice Bureau, a speech language therapist and lawyer Graeme Withers, who said his firm was not the registered office for Sinotech.
The Johnsonville Toy Library also uses the centre.
There was no sign of Sinotech or Shih Chuang Li when reporters visited, and the therapist, the community centre manager and Dunne’s office manager had not heard of them.
Lane called for an investigation, saying the fact Roy Li could apparently put one company into liquidation leaving creditors unpaid, then keep trading through another company with a “clearly fake” address, highlighted systemic regulatory failures.
“Anyone can pop out here [to New Zealand] on a three-month visa, set up a company with a false address and set up a domain name … this is causing so much pain around the country.”
A Ministry of Business, Innovation and Employment representative said the Companies Office’s Registries Integrity and Enforcement Team was investigating Sinotech’s address. If it was false and not corrected, the company could be struck off.
Office received and resolved about 400 address-related complaints and about 600 queries in 2014. Not all breaches resulted in prosecutions, since compliance, rather than penalising, was the goal.
The Office’s annual enforcement budget was about $1.2 million, which covered registry integrity, director bans, investigation and prosecution.
The Companies Office website records 47 convictions over the last five years.
RELIEVED, BUT FRUSTRATED
Meanwhile, Jade Cvetkov is moved by a generous response to a Givealittle appeal set up by friends to cover her loss from Pro1Digital’s collapse, but still angry about official inaction over the case.
Not only had nearly $2000 been donated by Thursday, but Nikon NZ and Photo Warehouse had offered her such a big discount on her chosen lens that she had closed the appeal.
Cvetkov felt mainly relief.
“You just become so untrusting of everything, it makes you fearful… I’m so, so grateful,” she said.
But she also hoped her experience would help improve controls over companies.
“Internet shopping is so much bigger than what it was, so it needs to come up in its standards and rules… you could be anywhere, start up, then disappear, and no-one does anything.”
Source – Stuff News story by Caleb Harris Published 6/08/15
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