The director of the embattled Forestlands group is fighting a push from New Zealand's market watchdog to have 18 companies put into liquidation.
Forestlands has been under investigation by the Financial Markets Authority (FMA) since last year and the regulator was concerned about a fair distribution to investors and the companies' failure to file financial statements. The Serious Fraud Office is also investigating.
While the FMA yesterday said it had applied to liquidate 18 Forestlands companies, its director Rowan Kearns said he would oppose the bid.
Kearns, in a statement released via a lawyer, said much of the analysis a liquidator would perform was the same as what was being done by KordaMentha already.
Kearns has instructed KordaMentha to get valuations of forestry assets as at sale date and trace inter-company lending.
"The director's view is that the analysis currently being undertaken by KordaMentha is no different to what a liquidator would assess regarding entitlement to the sale proceeds," Kearns' statement said.
"The difference is that KordaMentha's analysis is being funded by the director, Mr Kearns. To the extent that certain costs incurred by Mr Kearns would ordinarily be met by the Forestlands companies, Mr Kearns intends to offset those costs against any amounts determined as owing to the companies from Mr Kearns or entities associated with him," the statement said.
"If a liquidator is appointed, all of the liquidators' costs and additional associated legal costs will be payable from the funds held on trust for the Forestlands Companies, so reducing the amount available to shareholders. In the director's view, liquidation means that much of the work undertaken by KordaMentha and Buddle Findlay would likely be repeated at the cost of the shareholders," the statement said.
The FMA's liquidation application against the Forestlands companies was brought on multiple grounds including an alleged "delay on the part of the companies' director Kearns in notification to the shareholders of the sale of the companies' forestry assets, lack of progress with regard to distribution of the proceeds, failure to maintain an accurate share register, failure to keep adequate accounting records and what is alleged to be persistent failure to comply with the relevant reporting requirements."
additional reporting: BusinessDesk