MR No. 2015 – 014
30 April 2015
The two directors of SPI Property Fund Limited have today been fined $25,312 each for breaches of the Financial Reporting Act in the Auckland District Court.
The Financial Markets Authority (FMA) brought three charges against each of the directors, Murray Alcock and Allister Knight, for failing to file audited financial statements for SPI Property Fund Limited to the Registrar of Companies for the years ending 2011, 2012 and 2013. The directors pleaded guilty to the breaches.
Belinda Moffat, FMA Director of Enforcement and Investigations said, “We expect companies that offer securities to file their financial statements in a timely way to enable investors to make informed decisions about their investments. The court’s decision sends a further strong signal to companies raising funds from the public that the FMA will take enforcement action when companies persistently fail to meet their obligations.”
“Having access to public financial information helps investors to make decisions about the allocation of assets across their entire investment portfolio. It’s also critical information that enables the regulator to oversee and monitor firms that issue securities to the public,” said Ms Moffat.
The court confirmed that the maximum penalty of $100,000 under the Financial Reporting Act applied in this case even though sentencing occurred after 1 April 2014, being the date when the new financial reporting reforms under the Financial Markets Conduct Act came into force.
In his decision, Judge Thorburn said: “The purpose of the obligation to file reports is obviously to ensure transparency and preserve integrity in the management of investors' money. Directors of companies acquiring funds from the public, must assume a high level of accountability for that and always be able to demonstrate that the funds are being used and applied in a meticulous way conforming to the prospectus that the investors have responded to.”
For more information about the FMA’s review into non-filing of financial statements visit fma.govt.nz
09 300 0465
021 847 192
In November 2014, Murray Alcock and Allister Knight provided enforceable undertakings to the FMA. The undertakings were agreed between the FMA and the Directors after the FMA completed its investigation into the conduct of the Directors, and reached the view that it was likely that the Directors had breached financial markets legislation.
The directors undertook not to participate in seeking or holding investment funds from the public for five years and to repay SPI Property Fund Limited investors.