Graeme Hunter Banned From Mangement of Companies

Media Release

8 May 2008

Graeme Ray Hunter

Prohibition from acting in the management of companies; Section 385 Companies Act 1993

Graeme Ray Hunter has been prohibited from acting as a director, or in the management of companies for a period of four years and three months. The Deputy Registrar of Companies issued a Prohibition Notice under Section 385(3) Companies Act 1993 on 21 April 2008. The maximum terms of prohibition provided for under Section 385(3) Companies Act 1993 is five years.

The National Enforcement Unit of the Ministry of Economic Development (NEU) provided a report of recommendation to the Registrar of Companies that prohibition be considered following the liquidation of Nature Chem Laboratories Limited, which was liquidated on 4 April 2007.

Nature Chem Laboratories Limited was the main company involved in the manufacture and resale of chemical based cleaning products. The Prohibition Report alleged that Mr. Hunter, also using the companies Nature Chem 2007 Limited and AF Products Limited, mismanaged Nature Chem Laboratories Limited and at least partly contributed to its failure.

The issues of mismanagement reported by the NEU include:
 The retention of Crown funds and the failure to submit adequate tax compliance records;
 The failure to maintain adequate books and records;
 The misappropriation of assets and reckless trading; and
 Misrepresentation to distributors.

Mr. Hunter did not file submissions in opposition to the Prohibition Report and the Deputy Registrar was satisfied that the acts of mismanagement played a part in the insolvency of the company. The Deputy Registrar noted that the report included Mr. Hunter’s own statements and it would have been very difficult to produce information that would come to a different conclusion.

Prohibition under Section 385(3) Companies Act 1993 is meant primarily for the protection of the public. The Deputy Registrar noted a number of issues in Mr. Hunter’s conduct indicated that there was a need for the public to be protected.

In his minutes the Deputy Registrar stated that the failings of Mr. Hunter were fundamental - the requirement to keep adequate books and records is a fundamental, and not merely some technical obligation. He found that the failure to pay the Inland Revenue Department goes to the very essence of the duties and responsibilities of a director when that person is placed in a position of trust in undertaking voluntary compliance with statutory obligations. The intermingling of the affairs of the company with related companies demonstrates that Mr. Hunter would be a danger to the public unless some substantial period of prohibition was imposed. He also found the instances of repeated misrepresentation to creditors to be very disturbing.

Mr. Hunter is currently bankrupt, having been adjudicated on 17 April 2007. He is automatically prohibited from acting as a director or in the management of companies until the bankruptcy is discharged. If the bankruptcy is automatically discharged after three years on 17 April 2010, the prohibition under Section 385(3) Companies Act 1993 will run for approximately another year and three months until July 2011.

ends

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