NZ shell companies further exposed

01:10, Nov 26 2012

New Zealand is facing more international embarrassment over the ease with which fake entities from around the world can register as companies here.

The Guardian, the BBC and the International Consortium of Investigative Journalists have launched a year-long project to expose a global network of sham company directors behind more than 21,500 companies.

One of the biggest directors revealed by the study is a woman whose name features in the Companies Office here as a director and shareholder.

Many of the connections the new study cites include New Zealand.

Over the past two years numerous cases have emerged of companies registered here being fronts for international money laundering of drug money, fraud and terrorism involving characters ranging from the Russian Mafia to Mexican drug lords.

New Zealand allows anybody to register a company online from anywhere in the world. This has seen the country struck off a favoured European Union bank list because of money laundering by New Zealand-registered companies in Latvia.

Commerce Minister Craig Foss is working on getting legislation that would tighten the rules passed through Parliament.

ICIJ director Gerard Ryle said the organisation was using specialist software to crunch through hundreds of thousands of company entities to find patterns.

"We are marrying our findings with old-fashioned shoe leather and interviews from key insiders who can provide further context on this little known and loosely regulated world."

The ICIJ report, which has a front page splash in the Guardian and a documentary on the BBC’s Panorama, has identified and plans to name all 28 nominees they say play a key role in keeping hundreds of thousands of commercial transactions secret.

They do so by selling their names for use on official company documents, whilst giving addresses in obscure locations all over the world.

"They are of widely varying types, ranging from Russian oligarchs to perfectly legal but discreet speculators in the British property market," the study said. "Their only common factor: the wish for secrecy."

Those names include Geoffrey Taylor and his son Ian who have acted as directors many companies in New Zealand, the British Virgin Islands, Britain and Vanuatu.

They were behind SP Trading Ltd, a Queen Street based shell company, which was used in 2009 by a Kazakh businessman to fly arms from North Korea to Iran. They were instead seized in Thailand.

Ian Taylor told ICUJ his father had retired. He said that "only a small handful" of their companies were misused.

"Clients of certain nationalities are discriminated against only due to their citizenship. Some clients require privacy to avoid problems from jealous family members," Taylor said.

Also named in the study is British couple Sarah and Edward Petre-Mears who live on the Caribbean island of Nevis and have sold their services to more than 2000 entities with activities ranging from Russian luxury property purchases, to pornography and casino sites.

A Companies Office search here reveals 32 companies with the Petre-Mears directorship/shareholder links.

A number of them give the same Queen Street, Auckland, address used by the Taylors to create SP Trading. Some companies with Queen Street addresses have been struck off, but both couples still have active companies here.

A number are registered to a house at 334 Te Atatu Road in Auckland which is a set of flats.

The company names give no clue to their activities and include Progress Innovation, CN Export Services, Kazantip, and Christchurch registered Pan Pacific International Trading.

On the registration the Petre-Mears give their address as Shaw’s Estate, Newcastle, St James Paris, Nevis. The study said Sarah Petre-Mears, 38, appeared to be running one of the biggest business empires on Earth. It said her actual location was mysterious.

The UK companies register lists 12 different addresses for her, several in London. But none are real homes: several are Post Office boxes, collecting mail for hundreds of different locations, while others merely house the offices of incorporation agencies.

They eventually located her on Nevis but she did not want to talk.