Insolvency Practitioners Regulation Act 2019

Part 3 Provisions relating to insolvency practitioners

Subpart 1—Duty to report serious problems

60 Duty of insolvency practitioners to report serious problems

(1)

A person must take the steps set out in subsections (3) and (4) if the person has reasonable grounds to believe that a serious problem has arisen in relation to a company in respect of which the person acts as an insolvency practitioner.

(2)

In this section, a serious problem means any of the following circumstances:

(a)

the company, or a past or present director, officer, or shareholder of the company, has committed an offence:

(b)

a person who has taken part in the formation, administration, management, liquidation, or receivership of the company—

(i)

has misapplied or retained or become liable or accountable for the company’s money or property (whether in New Zealand or elsewhere); or

(ii)

is guilty of negligence, default, or breach of duty or trust in relation to the company:

(c)

a past or present director of the company has breached a director’s duty in a material respect:

(d)

the company has been managed in a way that has materially contributed to the company being a company described in section 385(1) of the Companies Act 1993.

(3)

As soon as practicable after identifying the serious problem, the person must report it to—

(a)

the Registrar; and

(b)

if the company is a licensed insurer (within the meaning of section 6(1) of the Insurance (Prudential Supervision) Act 2010), the Reserve Bank of New Zealand; and

(c)

if the serious problem concerns the possible commission of an offence, one or both of the following:

(i)

the New Zealand Police:

(ii)

the body responsible for investigating or prosecuting the offence.

(4)

The report must identify each person to whom the report is provided.

(5)

A person who fails to comply with subsection (1) commits an offence and is liable on conviction to a fine not exceeding $10,000.

(6)

Nothing in this section requires an insolvency practitioner to take any steps to investigate whether a serious problem has arisen.