New Zealand’s lack of controls on company regulation and overseas investment risk turning it into a “third rate Cayman Islands” of unregulated financial deals.
Alliance Economic Development spokesperson Quentin Findlay says allegations that Vanuatu based companies had used New Zealand’s lax companies laws and regulations to establish thousands of dummy corporations were highly concerning, when such activities had been allegedly used for money laundering or arms deals, according to media reports.
He says it is not surprising that these events had taken place given New Zealand’s ‘wild west’ free market approach to finance and investment.
“The lack of adequate regulation and controls allows the creation of dummy companies with little or no scrutiny. This is a result of the deregulation approach which provides little or no protection against bad practices.”
Mr Findlay says it is alarming United States authorities seemed prepared to take action, while those in New Zealand appeared to dither.
“This is an embarrassment to New Zealand.”
Mr Findlay referred to the 2009 case involving the Overseas Investment Office and American firm, Cedenco, where unacceptable practices were ignored.
The Alliance is calling for a thorough review of the Companies Act and related legislation, and for the Government to impose regulations to stop New Zealand’s slide towards a haven for pirate capitalists.