Mystery 'arms firm' director revealed

LAWRENCE SMITH/Stuff.co.nz

Lu Zhang

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A mysterious company director reportedly linked to North Korean arms trafficking can be revealed as a former South Auckland Burger King employee who says she made "one little mistake".

Lu Zhang, 28, is charged with 75 counts of making false statements in company registration forms – by the seemingly minor act of declaring her office address as her home address.

But that technicality saw her in Auckland District Court yesterday, linked with the hire of a Russian-owned cargo plane that was seized in Bangkok last December carrying 35 tonnes of arms, including rockets and grenades.

Authorities said the plane, allegedly en route from North Korea to Iran, was hired by SP Trading, a company registered with an Auckland address and listing Zhang as the sole director.

Zhang gave her residential address as 369 Queen St, Auckland, the same address used to create about 2500 shell companies in New Zealand and other countries.

As a result of questions raised about the ease of creating shell companies in New Zealand, Commerce Minister Simon Power commissioned a report now before the Cabinet.

Many of the Queen St shell companies were created by New Zealander Geoffrey Taylor, 66, and his sons Ian and Michael, who operate Vanuatu-based company GT Group.

Yesterday in court Zhang intimated guilty pleas to a number of the charges. Her lawyer, Frank Deliu, said she would contest 55 of the 75 charges on the grounds they had been laid out of time by the Companies Office.

Yesterday Zhang said she had been "shocked" when she learned police were investigating her for ties with arms trading.

The Chinese immigrant was hired by Mr Taylor in early 2008 to work at his firm, Global Fin Net, in Queen St.

"It was a very basic administrative job. I just file all the documents, check the emails, and look after the daily maintenance of the office."

She said Mr Taylor had explained to her and husband Paul Gao, 27, that the role of the business was to incorporate companies before selling them to people based overseas.

"The first time Geoffrey told us about this director thing we felt unsure because we know the director of companies has a responsibility," Zhang said.

"But we thought it would be OK because we would just open up the account and not have anything to do with the running of the company.

"We thought it is a little thing, not harmful to anyone."

Mr Taylor did not return calls to his Australian home, but in the past his son Ian has said he has met police voluntarily and provided information to help with inquiries relating to SP Trading.

Zhang said: "I would get around $20 per company I was nominee for, it wasn't very much money and it was just a part of my job." She only realised her actions could be illegal when she read about the saga surrounding the seizure of the plane.

Both she and her husband, who worked for Mr Taylor as an accountant, resigned and are now unemployed.

"We are just nobodies, we have studied, worked hard and made this little mistake we didn't know was wrong.

"But I will plead guilty because we have to pay the mortgage, pay the lawyer's fee and we don't want to cause our family more stress."

- © Fairfax NZ News