False address in Forestlands filings

Annual returns just filed for 18 Forestlands companies tied up in an $18 million asset freeze appear to have provided false details of their registered address.

Thousands of investors have been waiting since January for money due from the sale of their forests but payment has been delayed amid apparent disarray in the companies’ affairs.

In September the Companies Office gave notice it would remove all the Forestlands companies from the register for failing to file annual returns – a move that could harm investors’ efforts to recover money.

On October 12, the deadline for objections for removal to be made, Forestlands director Rowan Kearns filed returns for the 18 investment companies in the group.

The returns gave the companies’ address as 279 High St, Motueka, but inquiries by NBR have established that interests associated with Mr Kearns sold the property in February and it has since been occupied by another business.

The Companies Act requires company documents – such as the share register, accounting records and copies of shareholder communications – to be kept at its registered address unless the registrar is notified of an alternative location.

A Companies Office spokesman confirmed that 279 High St was the designated location of company records.

“As you have advised that this address may not be correct, the Companies Office will follow up on this with the companies,” he said. 

The property at 279 High St was previously owned by Forestlands NZ, a company owned and directed by Mr Kearns. Property records indicate it was sold on February 4, about the time the problems for Forestlands investors began to emerge.

The buyer was a company associated with the owner of the Motueka New World, Bruce Miller, who confirmed he had bought the property from Mr Kearns.

“I’ve leased it back out again – not to them though,” he said.

Mr Kearns could not be reached for comment. His law firm, Anthony Harper, did not return calls seeking comment.

In a statement to Forestlands investors today, the Financial Markets Authority said it had reminded Mr Kearns, through his lawyers, of the companies’ obligation to maintain share registers and have them available to be inspected.

Annual returns were not filed for Forestlands NZ and Forestlands Marketing, two companies owned by Mr Kearns associated with the administration of the 18 forest-owning companies.

The problems at Forestlands hit the public arena in March when the Financial Markets Authority said it had received complaints about the group and ordered $18 million in cash to be held in a law firm’s trust account pending further inquiry.

In May the FMA said it had referred some Forestlands matters to the Serious Fraud Office. In today’s update it said the Forestlands companies remain under investigation by the FMA and the SFO.

Insolvency practitioner KordaMentha has been engaged by Forestlands to advise on the distribution of its money to the satisfaction of the FMA.

However, there is concern among investors that the shareholding details being used for the process may not be accurate.

A Facebook group set up by Forestlands investors has been seeking to clarify their shareholding details to help inform that process.

In a post to group members on October 15, investor Des Howard told shareholders his collation of share records had revealed issues of concern.

“I have found another possibly significant issue through our collection of the share certificate images a lot of you have sent through. I have forwarded this issue to the SFO and FMA, however, I am sorry but I can not share it in the public arena just yet,” he wrote.

Mr Howard told NBR he would not discuss his findings until the authorities had a chance to review the information.

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