385 Registrar or FMA may prohibit persons from managing companies

(1)

This section applies in relation to a company—

(a)

that has been put into liquidation because of its inability to pay its debts as and when they became due:

(b)

that has ceased to carry on business because of its inability to pay its debts as and when they became due:

(c)

in respect of which execution is returned unsatisfied in whole or in part:

(d)

in respect of the property of which a receiver, or a receiver and manager, has been appointed by a court or pursuant to the powers contained in an instrument, whether or not the appointment has been terminated:

(e)

in respect of which, or the property of which, a person has been appointed as a receiver and manager, or a judicial manager, or a statutory manager, or as a manager, or to exercise control, under or pursuant to any enactment, whether or not the appointment has been terminated:

(f)

that has entered into a compromise or arrangement with its creditors:

(g)

that is in voluntary administration under Part 15A.

(2)

This section also applies in relation to a company the liquidation of which has been completed whether or not the company has been removed from the New Zealand register.

(3)

The Registrar or the FMA may, by notice in writing given to a person, prohibit that person from being a director or promoter of a company, or being concerned in, or taking part, whether directly or indirectly, in the management of, a company during such period not exceeding 10 years after the date of the notice as is specified in the notice. Every notice shall be published in the Gazette.

(4)

The power conferred by subsection (3) may be exercised in relation to—

(a)

any person who the Registrar or the FMA is satisfied was, within a period of 5 years before a notice was given to that person under subsection (5) (whether that period commenced before or after the commencement of this section), a director of, or concerned in, or a person who took part in, the management of, a company in relation to which this section applies if the Registrar or the FMA is also satisfied that the manner in which the affairs of it were managed was wholly or partly responsible for the company being a company in relation to which this section applies; or

(b)

any person who the Registrar or the FMA is satisfied was, within a period of 5 years before a notice was given to that person under subsection (5) (whether that period commenced before or after the commencement of this section), a director of, or concerned in, or a person who took part in, the management of, 2 or more companies to which this section applies, unless that person satisfies the Registrar or the FMA

(i)

that the manner in which the affairs of all, or all but one, of those companies were managed was not wholly or partly responsible for them being companies in relation to which this section applies; or

(ii)

that it would not be just or equitable for the power to be exercised.

(5)

The Registrar or the FMA must not exercise the power conferred by subsection (3) unless—

(a)

not less than 10 working days’ notice of the fact that the Registrar or the FMA intends to consider the exercise of it is given to the person; and

(b)

the Registrar or the FMA considers any representations made by the person.

(6)

No person to whom a notice under subsection (3) applies shall be a director or promoter of a company, or be concerned or take part (whether directly or indirectly) in the management of a company.

(7)

Where a person to whom the Registrar or the FMA has issued a notice under subsection (3) appeals against the issue of the notice under this Act or otherwise seeks judicial review of the notice, the notice remains in full force and effect pending the determination of the appeal or review, as the case may be.

(8)

The Registrar or the FMA may, by notice in writing to a person to whom a notice under subsection (3) has been given,—

(a)

revoke that notice; or

(b)

exempt that person from the notice in relation to a specified company or companies.

Every such notice shall be published in the Gazette.

(9)

Every person to whom a notice under subsection (3) is given who fails to comply with the notice commits an offence and is liable on conviction to the penalties set out in section 373(4).

(10)

In this section, company includes an overseas company that carries on business in New Zealand.

Compare: 1955 No 63 s 189A; 1988 No 236 s 5

Section 385 heading: amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 385(1)(g): inserted, on 1 November 2007, by section 34 of the Companies Amendment Act 2006 (2006 No 56).

Section 385(3): amended, on 1 April 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 385(3): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 385(4)(a): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 385(4)(b): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 385(5): replaced, on 3 May 2001, by section 15 of the Companies Act 1993 Amendment Act 2001 (2001 No 18).

Section 385(5): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 385(5)(a): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 385(5)(b): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 385(7): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 385(8): amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).