A record number of people were banned from directorships over the past year

Friday, 18 August 2017

Director of failed mining company Infratech Robert Cottle has been banned from directorship for a record 10 years.

A record 38 failed business people have been banned from being directors of any company in the past year, including one for a record 10 years.

Two other directors have also received lengthy bans from the Registrar of Companies.

Nelson businessman Robert Cottle is the first to serve the maximum 10-year ban for his negligence as sole director of failed gold mining company Infratech Mining.

Cottle lost millions of investor dollars on the premise that he could set up Colombia's largest and most profitable gold mine.

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The former bankrupt started the company in 2009 and claimed the business owned licenses to set up gold and platinum mines in Colombia that could pay returns of up to 1000 per cent a year.

His pitch to investors grew from seeking $9 million to $100m and led Cottle to some dubious money lenders around the world, including businessmen who had been convicted of running ponzi schemes.

The maximum lengths of bans was extended from five years to 10 years in 2014, the average for last year was 5 and half years.

Hamilton businessman Steven Morrow has been banned for nine years after three business failures.

Morrow owed Inland Revenue (IRD) about $350,000 in PAYE and instead used the money for other purposes that included personal spending and shifting it between companies.

Last year Morrow pleaded guilty to 40 charges and was sentenced to two years and eight months in prison.

Kendall Twigden was banned for eight-and-a-half-years.

Twigden was either a sole or co-director of three companies, Phoenix Forex, Restaurant and Acorn Publishing, all of which failed.

In 2013 the Financial Markets Authority warned investors against dealing with Phoenix Forex and the company owed creditors about $2.1 million.

IRD claimed Phoenix Forex owed $1.4m in unpaid taxes.

In his decision, deputy registrar of Companies Office Peter Barker called Twigden a 'menace to the public'.

'I consider Ms Twigden has thumbed her nose at the IRD and has effectively disregarded the IRD as a creditor. Her mismanagement was either wilful or fundamentally ignorant of what is required of a company director,' Barker said.

Ministry of Business, Innovation and Employment business services manager Ross van der Schyff said when directors fail in their duties it can causes losses for creditors, create a level of distrust in the community, and jeopardise New Zealand's reputation.

'By prohibiting these people from being directors, the Registrar of Companies provides protection for the public from directors and managers of companies who have been unscrupulous, incompetent or irresponsible,' van der Schyff said.

Collectively the business people have been banned from being directors for 209 years.

Institute of Directors chief executive Kirsten Patterson said the list of banned directors was 'very disappointing'.

She said it raised the importance of having regulatory codes that ensure directors abide by their legal, commercial and ethical responsibilities.