Govt moves to tighten up new company rules

Commerce Minister Simon Power. Photo / Mark Mitchell

Companies will be required to have a New Zealand-resident director or local agent to prevent New Zealand-registered companies being involved in international criminal activity, Commerce Minister Simon Power announced today.

This year Auckland-registered SP Trading Ltd was used to charter a Georgian plane to fly 35 tonnes of North Korean explosives and anti-aircraft missiles to Iran. The arms were seized in Bangkok airport.

Power said the new measures were designed to tighten the registration process against criminal activity from overseas.

"Our company registration processes are highly-respected but there have been increasing threats to our international reputation posed by overseas interests which use New Zealand-registered companies to undertake criminal activity," he said.

The New Zealand-resident directors or agents would be responsible for ensuring the companies provide accurate information to the Companies Registrar and would be liable for filling requirement breaches under the Companies Act.

In other changes the Companies Registrar will be able to flag companies under investigation, prevent someone acting as a director for five years, will get greater powers to take action where doubt exists about the accuracy of information and will have greater ability to deal with compliance and issues about directors bona fides.

"This will provide greater protection for legitimate businesses, which will be able to check the Companies Office website to see if there are concerns about the bona fides of the companies they are doing business with," said Power.

Legislation will be introduced to enact the changes.

- NZPA