MR No. 2015 – 18
25 May 2015
The two directors of Apple Fields Limited have today been fined $30,000 each at the Christchurch District Court for breaches of the Financial Reporting Act 1993.
The Financial Markets Authority (FMA) filed charges against directors Justin Prain and Mark Schroeder for failing to file financial statements with the Registrar of Companies for the years ending 2011, 2012 and 2013.The two directors defended the charges but were found to be liable following a hearing.
In its judgment on liability, issued in February 2015, the Court acknowledged the difficulties that the directors faced in having incomplete financial information. However, it also stated that in the circumstances it cannot be right for Apple Fields to be a non-compliant issuer on an indefinite, ongoing basis.
The Court noted that the reporting provisions are there to ensure that issuers that cannot comply, cannot continue to be issuers if they cannot meet the statutory criteria. It also noted that the Financial Reporting Act is designed to ensure timely and transparent audited accounts from which investors and shareholders are able to be appraised of the exact financial positioning, circumstance and nature of the company in which they have an investment. The full decision on liability can be found here.
“The fines imposed today reinforce the message to issuers of securities that we expect them to file their financial statements in an accurate and timely way. If they are unable to comply with the regulatory requirements then they need to consider whether they can continue to be issuers,” Belinda Moffat, FMA Director of Enforcement and Investigations said.
This case was taken following the FMA’s 2013 review of compliance with the Financial Reporting Act 1993. That review has resulted in fines being imposed on seven directors of seven companies. More information can be found here.
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