Wednesday, April 26, 2006



Parker exonerated

The Companies Office has completed their investigation of the allegations against David Parker, and the Crown Solicitor has concluded that there is no basis for prosecution. In the case of the key allegation - that Parker falsely stated in several annual returns for a company that he had gained the consent of all shareholders for the company not to be audited - the Crown Solicitor concludes that it cannot be proved even to a prima facie level, and that everything was above board. The three shareholders had or almost certainly had consented to the first three returns, and following the bankruptcy of Parker's business partner Russell Hyslop, the Official Assignee had consented and then eventually waived their future rights. It is unclear whether this waiver was actually legally effective, but it is sufficient to let Parker off the hook; in order to be a crime, a false or misleading statement must be known to be false or misleading.

A subsidiary invesigation of two other companies found a number of minor paperwork offences for which no-one is ever prosecuted and which are normally settled by paying a late fee. These were not considered sufficiently serious to justify prosecution.

Down in the sewer they are already muttering darkly and suggesting that this is another example of a Labour Minister being let off - a line surprisingly echoed by DPF - but having actually read the report, this isn't a refusal to prosecute, it's exoneration. I expect Parker to be back in Cabinet ASAP, and given these findings, I don't think there's any impediment to him resuming his former duties as Attorney-General.

On the minus side, this means I just posted off an OIA request to the wrong Minister. Bugger.

Update: I see ACT is also wallowing in the sewer, claiming that there are now "two laws" and that "business laws now mean nothing in New Zealand if you're a Minister in Helen Clark's Government". To the contrary - two laws would be persuing a groundless prosecution or prosecuting for offences that no-one else is ever prosecuted for, simply because they are a government Minister.

7 comments:

I am very disappointed in Rodney's press release. It is clearly wrong what he is saying and serves no purpose whatsoever.

Posted by Gooner : 4/26/2006 08:47:00 PM

One hopes that Parker now opens fire on a certain benighted Tory
Tragic Tabloid Gutter Glossy as well...

Craig Y

Posted by Anonymous : 4/27/2006 08:52:00 AM

I read the report and while I don't think he should be prosocuted I don't think he was exonerated.

While bankrupt the Official Assignee waived the rights of the requirement to an audit.

The fact that once the bankruptcy was discharged the shares were not automatically returned to Mr Hyslop (I'm a bit bemused about that point as I would of thought once discharged any assets still held by the Assignee would of been returned).

David Parker thought he was still the shareholder and listed him as such.

When the question if an audit was required David Parker stated on the documents that all shareholder agreed to not have an audit.

This was not the case. From stuff:

According to Mr Hyslop, Mr Parker filed a declaration to the Companies Office stating that the shareholders of Queens Park Mews Ltd decided unanimously not to appoint an auditor.

Mr Hyslop said he was never asked to approve the "unanimous" decision, and the declaration was, therefore, false.

The Companies Office investigated, saying yesterday that on legal advice there was "no basis whatsoever" for taking a prosecution against Mr Parker for filing a false or misleading document.

This was because Mr Hyslop had at first agreed to the audit waiver and after he was declared bankrupt the Official Assignee gave an audit waiver.

Mr Hide said the waiver could not have been legally granted for more than a year.

Legal advice to the Companies Office said it was an "interesting legal point" whether the waiver was "effective", but it was not material to the case because permission had been granted to not audit the failed and virtually worthless company.

This logic seems strange saying a waiver was given but then stating it's not material to the case.

The whole case for not prosocting wasthat the waiver was given initially and that the shares were never returned to Mr Hyslop.

This is what I understand from the report, but if anyone else can added further it would be appreciated.

Posted by Anonymous : 4/27/2006 10:13:00 AM

Anon: This logic seems strange saying a waiver was given but then stating it's not material to the case.

It's not that the existence of the waiver wasn't material, its that the question of whether it was legally effective isn't. As mentioned above, in order to be a crime, a false or misleading statement must be known to be false - i.e. you can't make one by mistake. Parker was perfectly entitled to take the Official Assignee's waiver at face value, and fill out his returns accordingly - and this removes any question of knowledge from the equation.

Posted by Idiot/Savant : 4/27/2006 10:28:00 AM

Yes, but how long does a waiver take effect for - now I think you can argue as long as he was bankrupt at the longest (3 years) but various people says it only lasts for one year.

If the waiver was no longer in effect and Mr Hyslop was still the owner of the shares which David Parker seemed to think was the case as he is still registered as a share owner in the company then David Parker knew he was filing a false return to the Compaines Office that all shareholders had agreed to not audit the company.

I think David Parker was saved by the fact that the shares hadn't been returned to Mr Hyslop which I still think is an interesting point from the Crown Law office.

The question foe me is 'for how long does the waiver stays in effect for' seems to be the crux of the whole argument which the Crown Law office ignores.

Which is my point that I don't think it exonerates David Parker as he made a conscious decision to put down something that was incorrect on the form.

Posted by Anonymous : 4/27/2006 01:04:00 PM

"Which is my point that I don't think it exonerates David Parker as he made a conscious decision to put down something that was incorrect on the form."

No! On the contrary - he made a decision to put down something he thought was correct because the OA told him so!

Posted by Anonymous : 4/27/2006 06:16:00 PM

"a groundless prosecution or prosecuting for offences that no-one else is ever prosecuted for"

Oh really! Parker made a false declaration either way you look at it. AND, the companies act does NOT allow for a "waiver" letter that applies "forever" - you must get unanimous agreement EVERY year. As for the no-one getting prosecuting for false declarations and the like, follow this link:

http://briefingroom.typepad.com/the_briefing_room/files/ministry_of_economic_development_financial_reporting_act_convistions.pdf

Posted by Zebedee : 4/28/2006 02:25:00 PM