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Cases before the courts

Current at 14 August 2018

Forestlands

6 September 2018

The High Court in Nelson has placed Forestlands companies 2-12 and 14-20 into liquidation.

The Financial Markets Authority (FMA) sought the appointment of liquidators by the court to bring independence and certainty to the resolution of the companies’ affairs.

See media release.

3 September 2018

The FMA’s application to liquidate the Forestlands companies numbered 2-12, 14-20 will be heard at the Nelson High Court on Thursday the 6th September. The FMA understands that the director no longer opposes the liquidation of these companies.

It is for the High Court to hear the case and determine the appointment of a liquidator. The FMA applied to the court to appoint a liquidator to bring independence and certainty to the process.  

The FMA has been alerted to an application to place Forestlands New Zealand in liquidation that is being brought by the Leaders Real Estate Agency. The FMA understands that this case is due to be heard before the Nelson High Court on the 4th September. The FMA is monitoring developments in this case.  

Forestlands New Zealand is a company in the Forestlands Group. No shares were issued to investors in this company and it is not a financial markets participant. This meant the FMA was unable to apply to the court to place this company in liquidation.

31 August 2018

The FMA’s application to liquidate the Forestlands companies has moved forward and will now be heard on the 6th September 2018 at 11:00am at the Nelson High Court.

The case had been due to be heard in November.

We will update investors further after the hearing.

13 August 2018

Some investors have been in touch with us over the last few weeks seeking an update on their investment in Forestlands. 

The FMA’s application to place Forestlands 2-20 into liquidation is currently scheduled to be heard on 26-27 November 2018 at the Nelson High Court. 

The director of the Forestlands companies is opposing the FMA’s application. 

As the matter is now before the courts, we can’t make further comment. This is because saying something publicly could potentially undermine the case we make before the courts. 

If you haven’t got a copy of the affidavit that sets out why the FMA is applying to liquidate the companies, then please get in touch via e-mail at forestlands@fma.govt.nz All shareholders are entitled to a copy of the affidavit and it contains information you should be across as a shareholder in the Forestlands companies. 

When the FMA’s inquiries began, $18 million was identified from the sale of the forests and put in a trust account. Following a court order in April 2018, a payment of income tax liabilities of $1,641,789 was made to IRD. 

The remaining funds are still in an interest bearing trust account. The money cannot be accessed without the permission of the FMA or a court order.

9 July 2018

A two day defended hearing of the liquidation application is currently scheduled for 26-27 November 2018 at the Nelson High Court.

This hearing will consider the FMA’s application to place Forestlands 2-20 into liquidation.

23 April 2018

FMA has applied to the High Court to place the Forestlands companies numbered 2-20 into liquidation.

The application for liquidation has been filed at the Nelson Registry of the High Court. An initial hearing will take place on April 26 at 11am. As required in liquidation proceedings, advertisements have today been placed in the Gazette and will also appear in the local newspaper, the Nelson Mail.

The application does not cover Forestlands NZ Limited and Forestlands Marketing who are also in the Forestlands group of companies. These companies are not financial markets participants.

Shareholders and Creditors are entitled to a copy of the affidavit setting out the FMA’s case in seeking the liquidation of these companies. This can be obtained in the following manner: please refer to the media release

Ongoing investigations

The FMA and Serious Fraud Office maintain separate ongoing investigations into Forestlands.

20 October 2017

The $18 million of investors’ funds is still held in trust and accruing interest, it cannot be released without a court order or the consent of the FMA. We continue to hold the view that it is the director’s responsibility to determine an appropriate methodology for a distribution.
We are aware that this process is complex and will take time to complete.
The FMA has continued to engage with the Forestlands director’s representatives and sought regular updates from them.

Questions have been raised about an automated notice from Companies Office stating an intention to remove the various Forestlands companies from the companies register. Companies Office has now confirmed that the director has filed annual returns for each of the ‘numbered’ Forestlands Companies. This operates as a complete stop on the Registrar’s intention to remove those companies, the Companies Office register no longer refers to them being under intended removal.
We have also reminded Mr Kearns, through his lawyers, of the companies’ obligation to maintain share registers and have them available to be inspected.

The Forestlands companies remain under investigation by the FMA and the SFO at this time.

7 August 2017

We have received queries about the sale price of the forests. The Overseas Investment Office has recently published the sale price received by Forestlands. This information is now available on the OIO website which references a sale price of $23,500,000.

Regarding the distribution of funds, as we have previously stated the responsibility for determining a process to allocate funds among the companies or investors remains with the Forestlands companies and their director. The FMA has been informed that the director has instructed third party experts, including Korda Mentha, with a view towards advising on distributions to shareholders of the Forestlands companies.

We cannot comment on other matters that are currently the subject of ongoing inquiries by the SFO or the FMA.
We will update investors when there is further information available.

30 June 2017

The FMA has previously notified that during its initial inquiries into Forestlands it identified $18 million which Forestlands said was to be paid to investors. We note that investors, who are shareholders in the Forestlands companies, had expressed concerns about Forestlands, how the assets were sold and how they would receive their share of the proceeds.

The FMA decided that the $18 million should be placed in trust to protect and preserve these funds and investors’ interests. It is not the FMA’s role to determine the process for allocating funds among companies or investors; that responsibility remains with the Forestlands companies and their director. The FMA remains concerned that the Forestlands companies do not have an appropriate method in place to distribute the proceeds from the sale of the Forestlands group’s forestry assets.

The absence of an appropriate distribution method prejudices the rights of all the Forestlands investors. We understand that the Forestlands companies have now instructed an independent professional services firm to assist with developing that method.  Any suggestion that the FMA is preventing the appropriate distribution of funds to investors in the Forestlands companies is inaccurate. As soon as an appropriate distribution method has been established, the FMA will decide whether to consent to the release of funds currently held on trust.

27 June 2017

The FMA has received a number of requests for further information about the Forestlands group of companies from shareholders in recent weeks. 

The FMA continues to seek to engage with the sole director of the Forestlands group and his legal representatives to ascertain what steps have been taken to put in place an appropriate process for determining and managing the distribution of the $18 million that is held on trust, accruing interest. The funds cannot be dispersed other than in accordance with a court order or with the approval of the FMA.

The FMA cannot determine or oversee how the funds should be distributed to individual investors - that remains the legal responsibility of the group of companies and their director. The funds will remain in trust pending the FMA’s inquiries in this regard.

1 May 2017

We have referred some matters to the Serious Fraud Office. We will continue to complete our inquiries in relation to financial markets issues.

During our inquiries we identified funds worth $18 million, and in agreement with Forestlands, these funds were placed in trust. This money remains in trust, earning interest.

This decision to place these funds in trust was taken to protect and preserve the identified funds and investors’ interests while the FMA’s inquiries continue.

We want to ensure that Forestlands has established a process for distribution that is proper and fair for all investors.

We understand that the Forestlands companies did not each own a set share in the pooled forestry assets.  Instead, each of the 18 different companies owned specific forests, each of which were at different ages and stages, and some of which had been partly harvested.

It is not the FMA’s role to determine the process for allocating funds among companies or investors. The responsibility for that remains with the companies and their director. To date, we have not received a satisfactory response from the director to our questions on these matters.

The Forestlands companies have also failed to file financial statements. Our investigation into these and other matters is ongoing.

22 March 2017

The FMA has received complaints from various investors in Forestlands. Forestlands has recently sold all its forestry assets.

We have identified $18 million which Forestlands say is to be paid to all its investors. That money has been placed in a trust account after our discussion with a Forestlands director. It will remain in trust pending further inquiry.

The FMA notes a statement that has been issued on the Forestlands website dated 15/03/2017.

We have concerns about the accuracy of this statement, which we have raised with Forestlands.

Following a query from an investor about this statement, the FMA wants to make clear that this was published without our knowledge. The FMA is currently investigating the events in question.

 

PTT Limited, Steven Robertson and related parties

26 October 2017

FMA has filed criminal charges against Steven Robertson in the Auckland District Court under the Crimes Act 1961.

11 December 2015

The following companies were placed into liquidation at the Auckland High Court:

  • PTT Limited
  • Maxwell Foster Limited
  • Gibson McLeod Limited
  • Alba International Limited.

PricewaterhouseCoopers (PwC), the receivers of the four companies, have been appointed as liquidators.  Information from the receivers regarding these companies is available here (http://www.pwc.co.nz/ptt/).  An amended update on PwC’s website noting the liquidations should be made shortly.

20 November 2015

FMA investigators are currently trying to make contact with investors in New Zealand and Australia who have invested with Mr Steven Robertson, through any of the following businesses:

  • PTT Limited
  • Maxwell Foster Limited
  • Harrington Group Limited
  • Gibson McLeod Limited
  • Russell & Brown Limited
  • Armstrong Group Limited
  • Morrison Ross Limited
  • Alba International Limited

The FMA has sent out questionnaires to known investors either by post or email in the last week. The purpose of the questionnaire is to help us to understand individual investor’s circumstances and experiences in dealing with these entities.

Investors who have not received a copy of the questionnaire should contact the FMA on 0800 434 567 or by email to questions@fma.govt.nz.

8 October 2015

PwC released its report to the High Court. A copy of this can be found here on PwC's website.

The FMA’s investigation is on-going. 

4 September 2015

A hearing was held to determine whether certain of the asset preservation orders granted on 13 August 2015 should be varied, modified or removed.  The Court approved certain variations, including increasing the weekly living allowance and authorising the release of certain personal and household assets and funds in payment of legal fees.

3 September 2015

PwC submitted their report to the High Court on a confidential basis.  

13 August 2015

The FMA confirms that it is undertaking an investigation into Steven Robertson, PTT Limited and related entities.

The FMA has obtained asset preservation orders over the assets of PTT Limited and associated persons, in light of concerns that investor funds may be at risk and that the companies may be operating in breach of financial markets legislation. 

The High Court also appointed John Fisk and David Bridgman of PricewaterhouseCoopers as Receivers and Receivers and Managers, on a limited basis, of the following entities and persons

  • PTT Limited
  • Maxwell Foster Limited
  • Gibson McLeod Limited
  • Alba International Limited
  • Steven Robertson Family Trust
  • Steven Robertson
  • Lisa Jane Robertson

Mr Fisk and Mr Bridgman have been granted powers to identify and preserve any funds and assets of PTT Limited (in receivership) and the names of clients. The receivers will provide a report updating the Court and the FMA on the steps they have taken and the current status of their work, by 3 September 2015. The receivers will contact any known clients.

The FMA encourages any client of PTT Limited to register with PwC and provide their contact details (phone, email and postal address) and evidence of any funds paid to PTT Limited.

Clients can contact PwC on the PTT Limited dedicated telephone message line +64 (09) 355 8023, via its dedicated page on the PwC website, facsimile +64 (09) 355 8013, or by mail PTT Limited (in receivership), c/- PwC, Private Bag 92162, Auckland.

The FMA also requests that any clients that have already contacted the FMA should also contact PwC.

 

ERoad (R v Sansom)  

This criminal proceeding relates to allegations of insider trading alleging breaches of the Financial Markets Conduct Act and attempting to obstruct the FMA for gather information under the FMA Act.

11 April 2018

A retrial has been scheduled for 10 September 2018 before a jury.

18 March 2018

A trial at the High Court for Mr Sansom resulted in a hung jury.  

14 June 2017

Sentencing: Jeffrey Peter Honey was sentenced yesterday to six months home detention at the Auckland District Court, after pleading guilty to one charge of insider trading under section 243(1)(a) and section 244 Financial Markets Conduct Act.  Mr Honey admitted to being an information insider advising and encouraging another person to trade. See media release.

11 April 2017

Defendant, Jeffrey Peter Honey pleaded guilty at the Auckland District Court to one charge of insider trading under section 243 Financial Markets Conduct Act - namely, being an information insider advising or encouraging another person to trade. See media release.

9 March 2017

Charges filed in court: The FMA filed charges in the Auckland District Court alleging breaches of the insider trading prohibitions contained in the Financial Markets Conduct Act 2013 (FMCA). The charges were filed in relation to trading in shares of Eroad (NZX:ERD).  The individuals charged are a current and a former Eroad employee. See media release.

 

 FSPR Case 1

These charges relate to a company and its New Zealand based director for breaches of the Financial Service Providers (Registration and Dispute Resolution) Act. 

31 August 2018

Hearing to be held at the North Shore District Court. 

27 Februrary 2018

Charges filed in court: The FMA filed charges in the North Shore District Court. The FMA alleges the company continued to hold out on two different websites that it was registered on the FSPR after it had been deregistered and despite subsequent warnings from Companies Office. See media release.  

 

FSPR Case 2

These charges relate to a separate company and its New Zealand based director for breaches of the Financial Service Providers (Registration and Dispute Resolution) Act. 

23 August 2018

Hearing to be held at the Wellington District Court. 

15 May 2018

Charges filed in court: The FMA filed charges in the Wellington District Court. The FMA alleges the company continued to hold out on two different websites that it was registered on the FSPR after it had been deregistered and despite subsequent warnings from Companies Office. See media release.

 

CBL

The FMA is seeking the court to determine whether continuous disclosure obligations for listed issuers continues to apply when the issuer is in voluntary administration. A case stated procedure is a way of asking the court for its opinion on a point of law. It is not an action taken against a party. 

14 August 2018

Decision announced that continuous disclosure obligations do not apply during administration.  See media release

6 August 2018

Hearing held at the Auckland High Court. 

13 July 2018

The FMA publishes an update about the ongoing investigation. See media release.

17 May 2018

The FMA announced its intention to file a case stated procedure on the issue of continuous disclosure obligations for listed issuers in voluntary administration. See media release