This undertaking is offered to the Securities Commission ("Commission") for acceptance under section 69J of the Securities Act 1978 by:
Contributory Mortgage Investments Limited ("CMI")
Mr John Martin ("Mr Martin")
C/- Shortland Street
Mr Peter van Nieuwkoop ("Mr van Nieuwkoop")
C/- Shortland Street
1.CMI is a company incorporated under the Companies Act 1993 on 30 September 1999. It is registered, and carries on business as, a contributory mortgage broker under the Securities Act (Contributory Mortgage) Regulations 1988 ("CM Regulations"). CMI's director is Mr Martin. Mr van Nieuwkoop is a consultant to CMI.s.
2.The Commission has inquired into CMI's compliance with the securities laws. In particular it has inquired into the offering and management of interests in the following three mortgages:
3.The Commission is satisfied that CMI contravened the following regulations:
4.The Commission also noted that CMI's accounting systems could be improved and that CMI proposes to upgrade its accounting system in the near future.
5.The Commission considers that CMI, CMN, Mr Martin and Mr van Nieuwkoop have failed to meet the standards of care and good governance that it expects from those who seek to raise funds from the public.
6.CMI, Mr Martin and Mr van Nieuwkoop acknowledge the Commission's concerns and wish to remedy this situation. CMI, Mr Martin and Mr van Nieuwkoop have therefore offered the undertakings set out below. The Commission has agreed to accept these undertakings under section 69J of the Act.
7.CMI, CMN, Mr Martin and Mr van Nieuwkoop will by 31 March 2006 have obtained advice about their respective obligations as issuer and trustee and/or as directors and officers thereof from an independent lawyer with experience in securities law who has not previously been involved with any of the parties or their businesses and who is satisfactory to the Commission.
8.CMI and CMN will by 31 March 2006 upgrade their accounting systems and ensure that they are adequate to keep all necessary records and comply with all applicable laws.
9.CMI and CMN will at all times after 31 March 2006 have at least one appropriately experienced, independent director who is satisfactory to the Commission.
10.CMI and CMN will forthwith engage their auditors to perform an enhanced audit role for two years whereby in addition to the obligations of an auditor acting under regulation 39 of the CM Regulations, they will as part of their quarterly audits:
11.CMI and CMN will ensure that, before any contributor's funds are paid out of its trust account or otherwise applied (other than to that contributor), the contributor has been given all information that may be material to his or her decision whether or not to invest, including all material information about CMI, CMN and their directors and officers.
12.CMI, Mr Martin and Mr van Nieuwkoop will refrain until 31 March 2006 from making any offers of securities to the public other than to refinance existing loans provided to borrowers comprising contributory mortgage funds previously raised by CMI (i.e. "rollover mortgages").
13.Mr Martin and Mr van Nieuwkoop will take all reasonable steps to ensure compliance by CMI and CMN with the undertakings set out in paragraphs 7 to 12.
14.CMI, Mr Martin and Mr van Nieuwkoop acknowledge that the Commission:
15.CMI, Mr Martin and Mr van Nieuwkoop acknowledge that this undertaking does not derogate from the rights and remedies available to the Commission or to any other person or entity arising from the conduct described in the undertaking.
16.CMI, Mr Martin and Mr van Nieuwkoop acknowledge that the Commission's acceptance of an enforceable undertaking under section 69J of the Act does not affect the Commission's power to investigate future conduct of any person, to take any action or exercise any power under the Act, or any other legislation, or to refer any matter for criminal prosecution or seek any civil penalties.
Signed for and on behalf of Contributory Mortgage Investments Limited
by its duly authorised officer Mr John Martin:
Signed by Mr John Martin
Signed by Mr van Nieuwkoop
Accepted by the Securities Commission
pursuant to section 69J of the Securities Act 1978
by its authorised delegate:
[Kathryn Ann Rogers]