The director of a company has been sentenced to 16 months home detention for various charges including knowingly providing false statements, causing loss of more than $600,000 to creditors and carrying on acting as director when he was prohibited from managing or being a director of a company.

The man, who has name suppression for now, was convicted of four charges under the Companies Act 1993, following investigations by the Ministry of Business, Innovation and Employment’s (MBIE) Integrity and Enforcement team and the New Zealand Police.

Earlier, the man had pleaded guilty to all charges and was sentenced at Palmerston North District Court on Tuesday 18 June 2024.

Commenting on the case, Acting National Manager of MBIE’s Criminal Proceeds Integrity and Enforcement Team, Vanessa Cook said:

“It is clear that this individual had no intention of ever honouring the contracts which his company entered into and that his actions have caused significant financial loss and harm.

“The offender was aware that his previous conviction of obtaining by deception prohibited him from being a director of a company for 5 years, and by holding office whilst prohibited, he has made himself personably liable for the debts of his company.

“People dealing with the directors of New Zealand companies are entitled to assume that they are not disqualified and MBIE’s Integrity and Enforcement team will not hesitate to prosecute individuals acting in this manner.

“If a member of the public wish to make a complaint or believes that they have information on a potential breach of the Companies Act, I would encourage them to get in touch via the Companies Office website.”

Details of charges under Companies Act 1993:

• Knowingly making false statements on documents filed in the Companies Register breaching Companies Act 1993, ss 377(1)(a) and 373(4)(c).

and

•  Acting as a director of a company whilst prohibited from doing so breaching Companies Act 1993 ss 382(1)(b), 382(4) and 373(4)(g)
•  In June 2017, the offender was convicted of obtaining by deception. Due to the defendant’s conviction, he was prohibited from being a director of a company for 5 years.
•  In October 2019, the offender changed his name.
•  In February 2020, despite knowing he was prohibited from being a director, the offender signed the standard director’s consent form for his company, certifying that he “was not disqualified from being appointed or holding office as a director of a company”.
• As a director, knowingly and with an intent to defraud, causes loss to creditors breaching Companies Act 1993, ss 380(3) and 373(4)(f)
• Between February 2020 and December 2021, the offender knowingly and with intent to defraud creditors did not pay invoices issued to his company which caused material loss to several victim companies.
• His company has accrued significant debt with creditors claiming to be owed a total of $613,222.19. By virtue of s 384 of the Companies Act 1993, the offender is personally liable for the debts incurred by the company as he held office as director whilst prohibited.
• As director, failing to comply with a notice provided by a liquidator pursuant to s 261 Companies Act 1993, ss 261(1), 261(6A) and 373(3)(a)
• In December 2021 the liquidator of the company contacted the offender as the sole director to discuss the liquidation and explained the documentation which he was required to provide as part of this process.
• Later that month, the liquidator prepared a s 261 notice, setting out the documents the offender needed to deliver to the liquidator’s office by 4 pm on 22 December 2021.
• In January 2022, MBIE’s the Integrity & Enforcement Team contacted the offender to comply with the s 261 notice. He still has not provided any of the requested documents to the liquidator.

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