Govt signals corporate fraud a low priority

Commerce Minister Simon Power missed his chance to tighten up company law before Parliament rose, the Green Party said today.

Mr Power promised that Parliament would consider urgent legislation to crack down on international financiers exploiting our soft rules around company registration to commit fraud, evade tax, and launder money.

"The Government has been sitting on advice from the Ministry of Economic Development detailing practical measures the Government could implement immediately to tighten up company law and protect New Zealand's reputation as a good place to do business," Green Party Co-leader Russel Norman said today.

"They've had this advice since February 2010 and chosen to do nothing.

"The modest amendments to the Companies Act 1993 are legislative changes we've previously offered to work collaboratively with the Government to pass."

The Green Party would support moves to require every New Zealand registered company to:

1. Have one resident director;
2. Ensure directors document their identity better;
3. Obtain an IRD number

These measures would accompany greater powers to the Company Registrar to police the Companies Act.

"The new laws would harmonise our company law with comparable overseas countries especially Australia," said Dr Norman.

"We'd also like to go further. Nominee directors need to be better regulated and the beneficial ownership of companies can be clarified further.

"The Government accepts already that there's a problem. 1,800 New Zealand companies have recently been deregistered due to 'possible illegal activity' While a lack of enforcement of current company law has meant our enforcement agencies have been unable to help international agencies in trying to combat international fraud.

"We've become such an easy country to do business in, we've attracted sophisticated criminals to our jurisdiction to 'do business'.

"Protecting the integrity of our business sector is vital for the health and prosperity of our wider economy."

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