7 Sep 2011

Hundreds of companies removed from register

1:42 pm on 7 September 2011

The Companies Office has taken steps to remove about 1800 firms in an effort prevent New Zealand-registered companies being used as vehicles for international fraud.

In response to questions from the Green Party, Commerce Minister Simon Power said an investigation of the firms that were removed found no evidence they were conducting business.

Mr Power could not say how many foreigners and company agents have misused New Zealand's company incorporation laws, but said the practice of a large number of shell companies being formed for clients overseas continues.

He admits the practice has harmed the country's reputation, because New Zealand registered firms have been used to commit crimes overseas, including money-laundering, tax evasion and fraud.

The Green Party has accused the minister of reacting too slowly to tighten up the rules.

In July last year the Government agreed to make changes to the law but so far that legislation hasn't been introduced to Parliament.

Green Party co-leader Russel Norman says the Government should move quickly and his party would support changes to close loopholes in the existing law.

Mr Power says new rules are being drafted and an amendment to the Companies Act will be introduced before the November general election.