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Consequences for failing to comply with financial statement filing obligations

Page last updated: 3 Jul 2014

News release
MR No. 2014 – 022
3 July 2014

The Financial Markets Authority (FMA) has filed charges against the directors of eight companies that raise funds from the public, for breaches of the Financial Reporting Act (FRA).

“Filing financial statements on time is a basic requirement for companies that issue securities to the public and failure to comply has serious consequences,” said Belinda Moffat, FMA, Director of Enforcement and Investigations.

“The FMA hopes these cases will help encourage better conduct and increase confidence in the fair and transparent operation of our financial markets.”

The FMA today released its review of non-filing of financial statements by companies who issued securities to investors. The review is based on the financial reporting of 416 limited liability companies with a 31 March 2013 balance date.  It shows that 305 companies, or 73 per cent, had filed their financial statements on time. However, despite reminder notices being sent, 43 entities, or 10 per cent of the total, still had outstanding accounts at November 2013.

Following further reminder notices to each of these entities, FMA started court prosecutions against the directors of seven entities that had persistently failed to file.  Proceedings were also initiated for the directors of one other entity with a September 2013 balance date that had repeatedly not filed financial statements.

The charges have been filed following FMA’s monitoring activity of the companies.

Belinda Moffat said directors were responsible for ensuring their companies filed financial statements in an accurate and timely way. “FMA decided on court action because these entities had persistently failed to file and presented the greatest harm to the market. This is determined either in terms of the number of investors, the amount of money involved in the companies, or an apparent disregard for the importance of ensuring that this important information is available.”

FMA’s concern is that failure to comply with filing obligations limits the availability of information to investors, the market and the regulator. This information is critical for an investor to make informed and timely investment decisions and for FMA to oversee compliance.

“We are sending a strong message to issuers of securities that there are serious consequences for failing to meet their filing obligations, “said Ms Moffat.

Read FMA's Review of non-filing of financial statements


Andrew Park
09 967 1215
021 220 6770


Charges have been laid for alleged breaches of the Financial Reporting Act against the directors of these companies:

Company name:

Prosper Hills (2004) Limited, Prosper Hills (2006) Limited, NZFIL3 Limited


Ross Collins

Current Status:

8 Charges filed; guilty plea entered; sentencing hearing 10 July


Company name:

Applefields Limited


Justin Prain and Mark Schroder

Current Status:

6 Charges filed; not guilty plea entered; next court date 24 July


Company names:

Heritage Park Taupo Limited and Prudential Real Estate Investments Limited


Thomas Jones and Hayden Jones

Current status:

8 Charges filed, no plea entered yet; next court date 24 July


Company names:

SPI Capital Limited and SPI Property Fund Limited


Murray Alcock and Allister Knight

Current status:

8 Charges filed, no plea entered yet; first call set for 30 July

NOTES: Directors’ statutory obligation to file financial statements

Under sections 10(1) and 18(1) of the FRA, the directors of an issuer must ensure that audited financial statements of the issuer, together with a copy of the auditor’s report on those financial statements, are filed with the Companies’ Registrar (Registrar) within five months and 20 working days of the issuer’s balance date.

Maximum penalty for failure to comply is $100,000.


Case: Apple Fields Limited - Justin Prain and Mark Schroeder

Case: Ross Collins

Case: SPI - Murray Alcock and Allister Knight