Since the Great New Zealand Shell Company Deregistration Frenzy of 2009-2011, which we rounded up here and here, the New Zealand Government, and the New Zealand Companies Office, have managed to catch a bit of sleep, bless them.
The New Zealand Companies Reform Bill 2011 2012 2013, whose first draft was lashed up in a month or two in 2011, still hasn’t made it into law. If the latest prod by the NZ Green Party is anything to go by, 2014 isn’t much of a prospect, either:
13424 (2013). Dr Russel Norman to the Minister of Commerce (10 Oct 2013): When does he expect to pass the Companies and Limited Partnerships Amendment Bill into law?
Hon Craig Foss (Minister of Commerce) replied: The Bill will be progressed as the legislative programme allows.
Perhaps that wouldn’t matter too much if the Ministry of Business, Innovation and Employment’s Corporate Risk Profiling Team was living up to its 2012 billing:
The government plans to merge the MED, the Department of Labour, the Ministry of Science and Innovation and the Department of Building and Housing into a new Ministry of Business, Innovation and Employment from July. Asked whether this would see the monitoring of the companies register stepped up, Foss said MED already operates a dedicated corporate risk profiling team.
“This team monitors all new company formations, requires identity verification for at-risk companies, shares information with other government agencies, and undertakes on-site compliance checks. To date, the team has successfully removed nearly 2,600 at-risk companies from the register. As a result of these activities, two major firms that incorporate companies on the behalf of others have severely curtailed their activities in New Zealand,” he said.
Yeah, right. In fact, the Team haven’t got all that close to putting a stop to the activities of GT Group, the rogue incorporator nonpareil that started this whole panic off, back in 2007. On April 6, 2013 “Naked Capitalism” published some more observations of the action in the NZ register, concluding:
“Evidently GT Group hasn’t quite finished with New Zealand after all. I imagine that the New Zealand authorities haven’t quite finished with GT Group, either.”
Well, the second sentence may have been too optimistic. But the first one is certainly right, and GT have been busy in the UK too. In a report by the Organized Crime and Corruption Project, dated 24 May 2013, GT Group veterans cropped up in connection with kleptocracy in Ukraine, which, a year later, is a decidedly topical subject:
A new team has abruptly taken over programming at TVi, one of Ukraine’s few remaining independent media outlets, and journalists are crying foul. Security personnel barred TVi’s former owner and managers from entering the building. Meanwhile, over five days in April, insiders say, a dizzying series of transactions involving companies registered in the British Virgin Islands and United Kingdom took place amid allegations of fraud and forgery.
The barred managers say their station has been taken over by raiders who have literally stolen the company. The truth is more complex.
The upheaval culminated on April 29 when more than 30 journalists quit the station, citing the new management’s attempts to pressure [them and] the lack of transparency over the way the new owners obtained control of TVi.
“We don’t see any prospects for fulfilling our professional responsibilities at the channel, because we cannot guarantee our audience fair and unbiased reports and we think that people calling themselves owners and managers of the channel have destroyed TVi’s reputation,” – a TVi journalists said in an online statement.
Prior to the takeover, the station was widely considered to be the only television outlet in Ukraine investigating corruption at top levels of government and openly criticizing Ukraine’s authoritarian President Viktor Yanukovych.
The story’s trail took a number of twists and turns through the murky world of offshore structures amid allegations of fraud, forgery, threats, massive credit-card debt and near-bankruptcy.
The twisting trail takes us to Balmore Invest:
Balmore Invest, the London-registered firm which now controls 95 percent of TVi, appears to have its own credibility problems.
Its Australian nominee director and shareholder, Rachel Amy Erickson, is listed in the UK company registry as running 139 active companies. When contacted by OCCRP, Erickson denied that the signature on Balmore’s incorporation documents was hers.
“This document is bearing my name and not my signature!!!” Erickson said in an email. “I have put in several enquiries into Balmore Invest and have no results as of yet. I need to find out who the registered agent is who lodged the paperwork for the company’s incorporation and registered the office address of 8 Shepherd Market, as there are of course 100’s of companies all registered at the same address and this address is causing me big headaches with all companies registered at this address being not companies to my knowledge!!!”
Whoever registered the company does not appear to have paid close attention to the paperwork. Between April 16 and May 3, The UK company registry notified Balmore that it would be dissolved unless its annual return was filed. It was filed and the firm was not liquidated.
Erickson claims her signature was forged on that return, and also on Balmore’s “declaration of trust” that names Altman beneficiary of this company. This document raises additional questions as it lists Altman’s US passport, which was expired before Dec. 9, 2011, when the document was issued.
Erickson is [the] former girlfriend of Ian Taylor. Taylor is co-founder of GT Group, a business registration firm based in Auckland, New Zealand, that specialized in setting up untraceable offshore companies, fronted by proxies. Many of the firms businesses have been used by organized crime including the Sinaloa Drug cartel, Russian officials who stole $230 million in tax money, the North Korean government and others, the reports say.
In the aftermath of the scandal, New Zealand authorities removed 1,800 companies from the New Zealand Companies Register, all of them established by GT Group. Erickson denied to OCCRP having any links with GT Group and claims to have split with Taylor in 2009.
Ms Erickson evidently misunderstood the OCCRP’s question, which was about her ongoing business relationship with Mr Taylor. Whether or not she’s still working for Taylor, or still, rather less relevantly, sleeping with him, note well: a year after she was alerted to the “forgery” of her signature on company documents in the UK, Ms Erickson is still landing directorships at many new UK companies.
If some rogue agent had been exploiting the UK register’s occasionally less than stellar verification of director identities, and nominating Ms Erickson as director without her consent, one imagines Ms Erickson would have had a little word with the UK Companies House about the signature forgeries. One would then have seen the registrations stop. But one has not seen the registrations stop.
Back to Balmore Invest:
Altman wouldn’t respond to OCCRP request for comments emailed to him on May 13. Eight days later Balmore’s corporate structure underwent drastic changes.
On May 21, Balmore’s filings with the UK registrar of companies showed that Erickson was replaced as Balmore’s director by Altman. Likewise, ownership of Balmore was transferred to five UK companies. All of them were registered on April 23, the same day when new management and owners showed up at TVi.
Also effective April 23 was the transfer of Balmore’s shares from nominee holder Erickson to the four UK companies in equal shares: Invest Info One, Invest Rating Two, Invest Media Three, Invest Creative Four and Invest Active Five. In four companies the proxy shareholders and directors resigned on the same day – May 21 – and Altman took over.
The nominee in Invest Active Five is still Erickson, while Invest Info One was established by Ian Taylor. Invest Creative Four lists Angelique Elizabeth Lilley as a director and shareholder.
Well, I’m not sure those stakes all add up quite right, but it hardly matters. The picture has changed in the mean time, anyway: right now (free registration required), Invest Creative Four is 100% owned by Mr Altman, while Ms Angelique Elizabeth Lilley is still a “director”.
Ms Lilley is, of course, another old hand at the cowboy company agent formerly known as GT Group. Rachel Amy Erickson’s good faith may be hard to substantiate; Angelique Elizabeth Lilley’s is at least equally precarious. She has a brisk way with reporters:
Approached by a Fairfax New Zealand reporter at her back section house in Nayland Rd, Stoke, this week, Ms Lilley declined to answer questions or be photographed.
“I’m not doing anything wrong, I’m just working,” she said.
She said incorrect information about “us” had been printed in the past but wouldn’t say who she was working for, or confirm any relationship with Geoffrey or Ian Taylor.
“Those are the names that always come up.”
I bet they do, sweetie. As a cynic might expect to discover, New Zealand Companies Office affirms that Angelique Elizabeth Lilley works for Ian Taylor, in the GT Group successor vehicles RMSC LIMITED, struck off on 25 Jun 2012, and ATHERSTONE, which, puzzlingly, is still registered in New Zealand.
Coming bang up to date, GT Group continues to register companies with that address in Nayland Road, Stoke, New Zealand. Right now, there are 34 of them.
Then there are a few GT Group strays, here and here, though they at least may be on the brink of being struck off, and more here, here, here, here and here. Thus, in New Zealand, there are still 60-plus registered GT Group companies that are easy to trace. GT Group’s contribution to Yanukovych’s final spree of theft and repression required just a handful of companies. In the inexplicably oblivious UK, GT Group still have hundreds and hundreds of live companies.
Amid the still-developing Ukraine mess, the continued tolerance shown by the New Zealand government and its agencies towards the machinations of GT Group and the defects of New Zealand Company Law, is very surprising.
New Zealand’s Corporate Risk Profiling Team doesn’t exactly look razor-sharp, either.
As a response to the crisis in Ukraine, the US is now threatening to implement antimoneylaundering action against post- Soviet kleptocrats. Slack company law and slack supervision of company registers will be natural targets for any US agencies keen to point fingers. The Brits will be first in line, no doubt, but I can’t help wondering if the New Zealand government will soon be having a very painful conversation with some impatient Americans.