Payment of a $1.52 million tax bill out of sequestered funds held following a $23.5 million sale of Forestlands’ assets was approved by the High Court. Assets are frozen while Forestlands’ relationship with Motueka entrepreneur Rowan Kearns is investigated by FMA.
Some 4400 investors took up offers to invest in forestry-owning companies under the Forestlands NZ banner promoted by Mr Kearns. They are asking where their money went. The Financial Markets Authority is seeking a court-ordered liquidation of Forestland companies. It alleges Mr Kearns failed to keep an accurate register of investors and failed to keep adequate accounting records. It also questions the relationship between some Kearns-controlled entities and the investors’ Forestland companies. Forensic accountants KordaMentha are investigating.
The High Court was told Forestland assets were sold for $23.5 million. A net balance of $18 million is currently sequestered in a law firm’s trust account. Deductions made from the $23.5 million sale price are part of a FMA investigation. Ten of the investors’ Forestland companies have been assessed for tax at $1.52 million. This tax bill was paid out of sequestered money to avoid tax penalties kicking in for late payment.
re Forestlands – High Court (23.04.18)
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