Action on shell companies coming

Commerce Minister Simon Power is set to take action on shell company creation but is not saying what it will be.

He ordered an investigation into New Zealand's easy company formation system after revelations a Queens Street, Auckland, shell company, SP Trading, had leased a Ukrainian-based cargo plan seized in Bangkok, Thailand, loaded with more than 30 tonnes of North Korea arms.

SP turned out to be one of hundreds of shell companies created by the Vanuatu based group GT Holdings Ltd, founded by English-New Zealand accountant Geoffrey Taylor.

Another of his creations, Magellan (NZ) Ltd of Queen Street, now owns of one of Ukraine's largest coal mines.

When the arms shipment saga broke Prime Minister John Key ordered an inquiry into shell company creation.

A report went to Mr Power who has declined to release it under the Official Information Act.

Yesterday a spokeswoman for Mr Power said the minister was now "actively considering the issue and is hoping to take the issue to Cabinet in the not too distant future."

Meanwhile Thomson Reuters report in trade news that Magellan had taken a 74.1 percent in the Bilorichenska coal mine in the Ukraine.

Formally state-owned, it was sold by coal wholesaler for an undisclosed price.

It is not possible in New Zealand Companies Office documentation to know who the beneficial owner of Magellan is.

SP Trading's beneficiary owner was eventually identified as a Kazakh arms trader Alexander Zykov.

Coal and gas operations, linked with ongoing tensions with neighbouring Russia, are highly strategic in Eastern Europe.

Ukraine mines, with the second worst safety record in the world after China, have also been revealed in the past to be Russian Mafia front operations.

Magellan are registered to Room 1404, at 363 Queen Street. It is a Quest Hotel guest room and no one returned Fairfax calls.

Its director is Agnes Jouaneau of Petit Paris, Mahe in the Seychelles.

Incorporated in March 2008 its 100 shares are held by Batavia (NZ) Ltd, another GT Holding company, also of 363 Queen Street.

Mr Taylor owns 80 percent of Batavia with Seychelles woman Stella Port-Louis holding 20 percent.

Ms Port-Louis is a director of hundreds of New Zealand companies.

- © Fairfax NZ News