Bankrupt's NZ connection
A New Zealand shell company has emerged as a key conduit in the asset-hiding efforts of a former billionaire, the courts in Ireland have heard.
Last week the Irish Commercial Court heard details of how New Zealand-registered company Corlex Sales - directed by two Latvian pensioners - had been paying the substantial legal fees of controversial bankrupt Sean Quinn.
The allegations, reported by the Irish Times, were filed as part of a case by administrators for a collapsed Irish bank seeking to claw back hundreds of millions of euros allegedly hidden by Quinn.
Quinn is an infamous figure in Ireland. His company, the Quinn Group, developed into a major conglomerate with major stakes in the Irish cement, glass and plastics industries.
At its peak in 2008, the Sunday Times Rich List assessed Quinn's personal net wealth at € 4.7 billion.
Disaster befell Quinn after he secretly built up a 28 per cent stake in Anglo Irish Bank. The bank, from which the Quinn Group had borrowed € 2.8b, was heavily exposed to the global financial crisis and avoided collapse in 2009 only by being nationalised.
The Irish Bank Resolution Corporation (IBRC), formed in 2011 to deal with the messes left by the collapse of the Anglo and the Irish Nationwide Building Society, began action against Quinn. He was bankrupted in January 2012, then sentenced to nine months in prison for contempt of court after accusations of a lack of co-operation with the regulators and asset-stripping in his bankruptcy.
The Irish Times reported Corlex and the New Zealand connection as one facet of the IBRC's ongoing case against Quinn, which includes transactions, assets and shell companies in Russia, Belize, Panama, Cyprus, India and the United Arab Emirates.
Corlex was registered in December 2007 by The Company Net, a company run by North Shore incorporation agent Glenn Smith.
Smith did not return calls last week, but he told the Sunday Star-Times last year he had quit the shell company business after a visit from the police agency, the Organised and Financial Crime Agency of New Zealand.
Corlex's owners were New Zealand firms directed by Cypriots and Panamanians, including nominee directors identified by international investigations as having previously been involved as fronts for east European corruption and money-laundering.
A long-awaited amendment to the Companies Act requiring New Zealand-registered companies to have resident directors has been languishing on Parliament's order paper since 2011.
The minister of commerce has expressed optimism it might pass into law by the end of the year.
According to the Companies Office in August 2011, administration of Corlex changed hands from Smith's The Company Net to Equity Law, a practice run by Russian-born former lawyer Evgeny Orlov. But it remained registered in this country.
Auckland-based Orlov told the Sunday Star-Times he "wouldn't have a clue" what Corlex had been up to as he hadn't served as a director for the company.
"I don't control that business, in any case," he said.
Orlov said he took his compliance with money-laundering regulations seriously, but many of the business he had inherited from Smith had been subject to audits by the Companies Office.
"Slowly those companies started being removed [from the Companies Register], but no one can ever avoid the use of companies for scandalous purposes."
Corlex was struck off the New Zealand register in June 2012.
Orlov was struck off the roll of barristers and solicitors by the New Zealand Law Society last year following sustained and unsupported attacks on the integrity of then Chief High Court judge Antony Randerson.
The New Zealand Lawyers and Conveyancers Disciplinary Tribunal said Orlov had "utterly failed in his duty to his profession, to the Court and indeed to the public in terms of their reasonable expectations of his behaviour".
Orlov said he was appealing the decision, both through the New Zealand courts and to the United Nations, and defended the use of offshore trusts and companies to protect assets from pernicious governments.
"Once you've made wealth you have the right to protect it, because once you've made wealth you're targeted by a number of institutions," he said. "It's the system - Big Brother, George Orwell, Animal Farm - we're living in now and no one cares."
Sunday Star Times