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Report of the Securities Commission on Aspects of the Affairs of Max Resources Limited

5
MAINTENANCE OF COMPANY RECORDS

5.1

There are a number of provisions in the Companies Act 1993 and the Securities Amendment Act 1988 which impose obligations on New Zealand registered companies to maintain various records.

5.2

Examples of these provisions include:

section 189 of the Companies Act obliges a company to keep at its registered office:

the constitution of the company;
minutes of all meetings and resolutions of shareholders within the last seven years;
an interests register;
minutes of all meetings and resolutions of directors and directors' committees within the last seven years;
certificates given by directors under the Companies Act within the last seven years;
the full names and addresses of the current directors;
copies of all written communications to all shareholders or all holders of the same class of shares during the last seven years, including annual reports;
copies of all financial statements and group financial statements for the last seven years;
the accounting records of the company for the current year and for the last seven completed accounting periods;
the share register.

Under section 195 of that Act a company need not keep its accounting records in New Zealand. However certain records must be sent to New Zealand and notice of the place where the accounting records are kept must be given to the Registrar of Companies.
Section 189(3) of the Companies Act 1993 allows companies to keep the records required to be kept at the registered office (other than the share register) to be kept at another place in New Zealand provided the Registrar of Companies is notified.

Under section 25 of the Securities Amendment Act 1988 every public issuer is obliged to maintain a file of all notices given to it under the sections of that Act requiring notification of substantial security holders and of changes in their relevant interests. This file has to be kept in New Zealand either at the company's registered office, the office of the issuer's share registrar, or the principal place of business of the issuer.

5.3

The Company's registered office is at the offices of Sinclair & Wood, Tauranga. While that firm kept a copy of the Company's constitution on its audit files, it did not appear to keep any of the other records or files required by the Companies Act and the Securities Amendment Act.

5.4

As far as we know Max did not advise the Registrar of Companies that the records it was required to keep in New Zealand were kept at a location other than its registered office.

5.5

A number of the powers available to the Registrar of Companies and the Commission are rendered ineffectual when a company does not retain its primary records within the New Zealand jurisdiction.

5.6

Langoulant and McShane were joint Company Secretaries.

Referral

5.7

We are referring this matter to the Registrar of Companies.