Corporations (Investigation and Management) Act 1989
Public Act
1989 No 11
Date of assent
22 March 1989
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Short Title
This Act may be cited as the Corporations (Investigation and Management) Act 1989.
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Interpretation
(1)
In this Act, unless the context otherwise requires,—
Corporation means a body of persons, whether incorporated or not, and whether incorporated or established in New Zealand or elsewhere
Court means the High Court
Document means a document in any form whether signed or initialled or otherwise authenticated by its maker or not; and includes—
(a)
Any writing on any material:
(b)
Any information recorded or stored by means of any tape-recorder, computer, or other device; and any material subsequently derived from information so recorded or stored:
(c)
Any label, marking, or other writing that identifies or describes any thing of which it forms part, or to which it is attached by any means:
(d)
Any book, map, plan, graph, or drawing:
(e)
Any photograph, film, negative, tape, or other device in which one or more visual images are embodied so as to be capable (with or without the aid of some other equipment) of being reproduced:
Information includes data, documents, and forecasts
Minister means the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is for the time being responsible for the administration of this Act
Minister: this definition was substituted, as from 1 October 1995, by section 10(3) Department of Justice (Restructuring) Act 1995 (1995 No 39).
Person includes a body of persons whether incorporated or not
Registrar means the Registrar of Companies and includes a Deputy Registrar
Subsidiary means, in relation to a corporation that is a company registered under the Companies Act 1955, a subsidiary within the meaning of sections 158 and 158A of that Act, and in all other cases, a subsidiary within the meaning of sections 5 and 6 of the Companies Act 1993.
Subsidiary: this definition was substituted, as from 1 July 1994, by section 2 Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16).
(2)
For the purposes of this Act, a person is an associated person of a corporation if—
(a)
That person directly or indirectly controls the management of the corporation; or
(b)
That person owns directly or indirectly,—
(i)
In the case of a corporation that is a company registered under the Companies Act 1955, 20 percent or more in nominal value of the equity share capital (as defined in section 158 of that Act) of the corporation; or
(ii)
In all other cases, 20 percent of the issued shares of the corporation, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital:
(c)
The corporation directly or indirectly controls that person; or
(d)
The corporation owns directly or indirectly,—
(i)
In the case of a person that is a company registered under the Companies Act 1955, 20 percent or more of the equity share capital (as defined in section 158 of the Companies Act 1955) of that person; or
(ii)
In all other cases, 20 percent or more of the issued shares of that person, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital:
(3)
For the purposes of Part 1 of this Act an associated person of a corporation also includes a person who is substantially indebted to the corporation.
(4)
Where a body corporate incorporated outside New Zealand or, as the case may be, any unincorporated body having its head office or principal place of business outside New Zealand, carries on business or has assets in New Zealand, the provisions of this Act shall apply in respect of that business or those assets as if the business were carried on, or the assets were held, by a separate person.
Subsection (2)(b) was substituted, as from 1 July 1994, by section 2 Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16).
Subsection (2)(d) was substituted, as from 1 July 1994, by section 2 Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16).
That is, or may be, operating fraudulently or recklessly; or
(b)
To which it is desirable that this Act should apply—
(i)
For the purpose of preserving the interests of the corporation's members or creditors; or
(ii)
For the purpose of protecting any beneficiary under any trust administered by the corporation; or
(iii)
For any other reason in the public interest,—
if those members or creditors or beneficiaries or the public interest cannot be adequately protected under the Companies Act 1955 or the Companies Act 1993 or in any other lawful way.
Section 4(b)(iii) was amended, as from 1 July 1994, by section 2 Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16) by inserting the words “or the Companies Act 1993”.
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General objects of Act
(1)
The general objects of this Act are—
(a)
To confer powers on the Registrar of Companies to obtain information concerning, and to investigate the affairs of, corporations to which this Act applies:
(b)
In the case of a corporation that is, or may be, operating fraudulently or recklessly, to limit or prevent—
(i)
The risk of further deterioration of the financial affairs of that corporation; and
(ii)
The carrying out, or the effects of, any fraudulent act or activity:
(c)
In the case of a corporation referred to in section 4(b) of this Act, to preserve the interests of its members or creditors or beneficiaries or the public interest:
(d)
To provide for the affairs of corporations to which this Act applies to be dealt with in a more orderly and expeditious way.
(2)
The powers conferred on the Governor-General, the Minister, the Securities Commission, and the Registrar shall be exercised in accordance with the general objects of this Act.
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Meaning of operating fraudulently or recklessly
For the purposes of this Act, a corporation is operating fraudulently or recklessly if—
(a)
It contracts debts which the officers of the corporation did not, at the time the debts were contracted, honestly believe on reasonable grounds the corporation would be able to pay when they fell due for payment as well as all its other debts (including future and contingent debts); or
(b)
It carries on any business or operates in a reckless manner; or
(c)
It carries on any business or operates with intent to defraud its creditors or members or the creditors or members of any other person, or for any other fraudulent purpose.
Nothing in this Act shall be regarded as imposing on the Registrar, or any other person, any duty or obligation—
(a)
To supervise the affairs of any corporation; or
(b)
To apply or operate any system of supervision of any class of corporations or of corporations generally; or
(c)
To exercise any power conferred by this Act in respect of any particular corporation.
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Consultation with Reserve Bank
(1)
For the purposes of this section—
Registered bank means a registered bank within the meaning of section 2 of the Reserve Bank of New Zealand Act 1989
Specified institution means a person that continues to be subject to Part 5C of the Reserve Bank of New Zealand Act 1964 by virtue of section 190 of the Reserve Bank of New Zealand Act 1989.
(2)
The Registrar shall consult with the Reserve Bank before—
(a)
Giving a written notice requiring any registered bank or specified institution to supply any information under section 9 of this Act:
(b)
Appointing any person to carry out an investigation of the affairs of any registered bank or specified institution under section 19 of this Act:
(c)
Giving a written notice to any registered bank or specified institution that it is considered to be a corporation at risk.
(3)
The Securities Commission shall consult with the Reserve Bank before making a recommendation to the Minister under section 38 of this Act in respect of any registered bank or specified institution.
Section 8 was substituted, as from 1 February 1990, by section 185 Reserve Bank of New Zealand Act 1989 (1989 No 157).
Supply of information by, and investigation of affairs of, corporations
Power to request information
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Registrar of Companies may require corporation or associated person to supply information
(1)
The Registrar may, by notice in writing to any corporation or any associated person of a corporation, require that corporation or associated person to supply to the Registrar such information relating to the business, operation, or management of that corporation for such periods and in such form as may be specified in the notice.
(2)
Every corporation and every associated person commits an offence against this Act if, without lawful justification or excuse, it—
(a)
Fails to comply in any respect with any of the provisions of this section, or with any of the requirements of the Registrar under this section or section 10 of this Act; or
(b)
Supplies any information which it is required to supply under this section which is false or misleading in a material particular.
Compare: 1964 No 134 s 38L(1), (6); 1986 No 131 s 10
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Requirement that information be audited
The Registrar may, by notice in writing to a corporation or an associated person of a corporation, require any information which that corporation or associated person is required to supply pursuant to section 9 of this Act to be audited by an auditor approved by the Registrar.
Compare: 1964 No 134 s 38L(3); 1986 No 131 s 10
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Disclosure of information to Registrar by trustees or statutory supervisors
Every person who holds, or at any time has held, office under the Securities Act 1978 or the Retirement Villages Act 2003 as a trustee or statutory supervisor for the holders of any securities issued by a corporation shall disclose to the Registrar information relating to the affairs of that corporation obtained in the course of holding that office if, in the opinion of that person,—
(a)
The corporation is insolvent or is likely to become insolvent or is in serious financial difficulties; or
(b)
The corporation has breached, or is likely to breach, in a significant respect,—
(i)
The terms of the trust deed or deed of participation; or
(ii)
The terms of the offer of the securities; or
(c)
The disclosure of the information is likely to assist, or be relevant to, the exercise of powers under this Act.
Compare: 1964 No 134 s 38M(3); 1986 No 131 s 10
Section 11 was amended, as from 1 May 2007, by section 108 Retirement Villages Act 2003 (2003 No 112) by inserting “or the Retirement Villages Act 2003” after “Securities Act 1978”. See clause 2(d) Retirement Villages Act Commencement Order (No 2) 2006 (SR 2006/296).
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Trustee or statutory supervisor to inform corporation of intention to disclose
Every trustee or statutory supervisor shall, before disclosing any information to the Registrar under section 11 of this Act, take reasonable steps to inform the corporation of the intention to disclose information and the nature of that information.
Compare: 1964 No 134 s 38M(5); 1986 No 131 s 10
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Disclosure of information to Registrar by auditors
Every person who holds, or at any time has held, office as auditor of a corporation, or of an associated person of a corporation, pursuant to any enactment shall disclose to the Registrar, if requested to do so by the Registrar by notice in writing, information relating to the affairs of that corporation obtained in the course of holding that office, in such form as may be specified in the notice.
Compare: 1964 No 134 s 38M(1); 1986 No 131 s 10
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Registrar to inform corporation of intention to request information from auditor
The Registrar shall, before requesting an auditor to disclose information pursuant to section 13 of this Act, take reasonable steps to inform the corporation of the Registrar's intention to do so and the nature of the information sought.
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Protection of trustees, statutory supervisors, and auditors
(1)
No civil, criminal, or disciplinary proceedings shall lie against any trustee, statutory supervisor, or auditor arising from the disclosure in good faith of information to the Registrar pursuant to section 11 or section 13 of this Act.
(2)
No tribunal, body, or authority, having jurisdiction in respect of the professional conduct of any trustee, statutory supervisor, or auditor shall make any order against, or do any act in relation to, that person in respect of the fact of such disclosure.
(3)
No information received by the Registrar pursuant to section 11 or section 13 of this Act shall be admissible as evidence in any proceedings against the trustee, statutory supervisor, or auditor concerned.
(4)
Nothing in subsection (3) of this section shall limit the admissibility of any information obtained in any other way.
Compare: 1964 No 134 s 38M(2), (4); 1986 No 131 s 10
Information required to be supplied, pursuant to section 9 or section 13 of this Act, by a corporation or an associated person or an auditor shall be supplied to the Registrar at such time and at such place as may be specified in the notice.
(2)
A notice given pursuant to section 9 or section 13 of this Act may, by a subsequent notice, be revoked, varied, or amended by the Registrar.
Compare: 1964 No 134 s 38L(4), (5); 1986 No 131 s 10
Powers to obtain information and documents
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Powers to obtain information and documents
(1)
Where the Registrar is satisfied—
(a)
That any information supplied to the Registrar by a corporation or an associated person pursuant to this Part of this Act is false or misleading in a material particular; or
(b)
That a corporation or an associated person has failed to comply with any requirement to supply information pursuant to section 9 of this Act—
the Registrar may,—
(c)
By notice in writing to that corporation or associated person, require that corporation or associated person to supply to the Registrar, within the time specified in the notice, such information relating to the business, operation, and management of that corporation as may be specified in the notice; or
(d)
Appoint in writing any person to enter upon and search any premises and inspect, remove, and take copies of any documents, or extracts from documents, relating to the business, operation, and management of that corporation in the possession of, or under the control of, any person and, where necessary, require the reproduction in usable form of any information recorded or stored in those documents.
(2)
Every person commits an offence against this Act who, without lawful justification or excuse, hinders, obstructs, or delays, in the conduct of any inspection pursuant to this section, any person duly authorised to make the inspection.
(3)
A corporation or an associated person commits an offence against this Act if, without lawful justification or excuse,—
(a)
It fails to comply with any requirement of the Registrar under subsection (1)(c) of this section; or
(b)
It supplies any information required to be supplied pursuant to subsection (1)(c) of this section that is false or misleading in a material particular.
Compare: 1964 No 134 s 38N(1), (9), (10); 1986 No 131 s 10
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Requirements on entering and searching premises
(1)
No person appointed pursuant to section 17(1)(d) of this Act shall enter upon and search any premises, or inspect, remove, or take copies of any documents, or extracts from documents, in the possession of, or under the control of, any person, or require the reproduction in usable form of any information recorded or stored in any documents, unless—
(a)
The occupier of the premises or the person who has possession of the documents agrees; or
(b)
That person obtains a warrant under section 24 of this Act.
(2)
Every person authorised to enter upon and search any premises pursuant to a warrant obtained under section 24 of this Act shall, on first entering those premises, and, if requested, at any subsequent time, produce—
(a)
Evidence of that person's authority to enter the premises; and
(b)
Evidence of that person's identity.
Compare: 1964 No 134 s 38N(2), (7); 1986 No 131 s 10
Investigations
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Investigation of affairs of corporation
Where it is necessary or desirable for the purpose of determining whether to exercise the powers conferred under Part 2 or Part 3 of this Act that an investigation of the affairs of any corporation should be carried out, the Registrar may appoint in writing any person to carry out an investigation of the affairs of that corporation.
Every person commits an offence against this Act who, without lawful justification or excuse,—
(a)
Hinders, obstructs, or delays in the conduct of an investigation, any person appointed under section 19 of this Act to carry out that investigation; or
(b)
Refuses to answer any question put to him or her by any such person; or
(c)
Supplies any information required to be supplied pursuant to section 21(1) of this Act which is false or misleading in a material particular.
(2)
A corporation commits an offence against this Act, if, without lawful justification or excuse,—
(a)
It fails to comply with any requirement of a person appointed under section 19 of this Act to carry out an investigation; or
(b)
It supplies any information required to be supplied pursuant to section 21(1) of this Act which is false or misleading in a material particular.
(3)
A statement made by any person in answer to any question put by a person appointed under section 19 of this Act to carry out an investigation of the affairs of a corporation shall not be admissible in criminal proceedings against the maker of the statement.
Compare: 1964 No 134 s 38O(11), (12), (13); 1986 No 131 s 10
