Valetta, Malta - even here, NZ trusts have their appeal. Photo / iStock
Valetta, Malta - even here, NZ trusts have their appeal. Photo / iStock
Politician's Kiwi connection sparks political row in far-off Malta.
A New Zealand trust has helped fuel a political scandal in the tiny island republic of Malta.
This country attracts few tourists from the Mediterranean archipelago, but at least one member of its political elite - Energy and Health Minister Konrad Mizzi - deems New Zealand an attractive depot for his assets.
The 38-year-old this week rejected calls for his resignation after his overseas interests were laid bare by a blogger and seized on by local media.
Those interests include the Rotorua Trust, which holds shares in a Panama-based company which Mizzi said had no assets, nor a bank account.
As a stable democracy, this country is a popular choice for overseas trusts. Exiled Russian tycoon Sergei Pugachev - once known as "Putin's banker" - is one other foreigner known to have set up trusts here.
Mizzi's is managed by Orion Trust New Zealand, a trustee company based at Bentleys Chartered Accountants in central Auckland.
Its directors include Remuera's Roger Thompson and two men from Panama.
Malta energy minister Konrad Mizzi.
Shell games
An Auckland firm with links to the infamous SP Trading has been tipped into liquidation just as the Companies Office was poised to boot it off the register.
The company is directed by the Phillipines' Nesita Manceau, who is associated with hundreds of entities struck off by the Registrar of Companies.
Notably, Manceau was the director and shareholder of Vicam (Auckland), which in turn owned SP Trading - a New Zealand-registered firm that caused an international scandal and helped spur a Government crackdown on shell companies.
SP Trading chartered a plane that in 2009 was caught transporting 35 tonnes of weapons and explosives from North Korea to Iran.
The company's address was a rented office on Auckland's Queen St and its sole director worked at Burger King.
Some five years after SP Trading illustrated how shell companies were taking advantage of New Zealand's relaxed registration rules, laws came into effect requiring all firms to have a local director.
These directors are also required to provide their date and place of birth and identify the ultimate owner of the firms they control.
Almost 2500 non-complying companies have since been purged by Companies Office officials.
One yet to get the boot was Dolven Limited, also directed by Manceau.
Although Registrar of Companies Mandy McDonald gave notice to Dolven that this action was imminent, the High Court last month put the firm into liquidation before it could happen.
Liquidator Vivian Fatupaito told Business Insider her appointing creditor was Sontrin Products LLP, a limited liability partnership from Britain.
That partnership, in turn, is owned by two firms run out of Belize, a central American tax haven.
Business Insider, despite his best efforts, was unable to follow the trail any further.
McDonald is already facing a legal challenge over the new director rules, Business Insider can reveal.
The regulations require companies to have a director who either lives in New Zealand or in an "enforcement country" (such as Australia).
What it means to "live in New Zealand", however, is not defined with any specificity.
McDonald's view is that a director lives here if "he or she personally is present in New Zealand for more than 183 days in total in a 12-month period".
While McDonald is prepared to hear arguments from those who fail to meet that test, one person wants the High Court to decide their case. The Ministry of Business, Innovation and Employment this week confirmed an appeal had been filed, but would not comment further.
In the three months to September, just over 2000 reports came in concerning $1.2 billion (down from 3000 and $1.6 billion in the same period a year earlier). Photo / Greg Bowker
Cleaner cash?
A twin plank of the regulatory crackdown on shell companies was anti-money laundering laws, which aim to stop the $1.5 billion of dirty funds thought to be washed through New Zealand each year.
These regulations forced the likes of fund managers, derivatives issuers, debt collectors and casinos to have systems in place guarding against money laundering.
These institutions and others covered by the law must perform due diligence on customers, monitor accounts and report suspect transactions to police.
The number of these reports and the value of the fishy transactions involved has since surged - from $545 million in the year to June 2013, to $3.5 billion in 2014, and $8.4 billion in 2015. But this torrent has now begun to abate. In the first two quarters of the year to June, the amount of suspicious money being brought to police attention has dropped.
In the three months to September, just over 2000 reports came in concerning $1.2 billion (down from 3000 and $1.6 billion in the same period a year earlier).
The figures took another dive in the December quarter, with the fishy funds tally falling to $798 million.
The police Financial Intelligence Unit is still analysing the trend and says it is likely to report on it this month.
Business Insider does not believe New Zealand has purged itself of the money laundering scourge.
It is more likely the level of paranoia in the industry has simply abated, and financial institutions are more comfortable in deciding what they should and should not report.
