The Forestlands group had a complicated structure in which 18 individual companies owned separate forests. Photo: Unsplash / Oliver Paaske
The founder, director and sole trader of Forestlands, Rowan Kearns, has pleaded guilty to making false statements and other charges related to financial reporting.
The criminal charges filed by the Financial Markets Authority (FMA) related to disclosure and financial record-keeping breaches, with a maximum penalty of $200,000 or five years in jail.
A jury trial had been set down for March, however, Kearns' guilty pleas meant the case could proceed to sentencing, without a trial.
The FMA said it would not comment on the case until after sentencing, which was expected to take place at Nelson District Court on 2 May.
Motueka-based Forestlands was put into liquidation in 2018 as the FMA followed up on shareholder complaints of not being able to get information about a 2016 sale and access to the proceeds.
The Forestlands group had a complicated structure in which 18 individual companies owned separate forests at various stages of growth and harvesting, totalling 1934 hectares on the east coast of the North Island and the south west of the South Island.
Investors subscribed for shares worth $2.75 million in each company, and were given a class of shares which offered dividends and payouts on winding up but no voting rights.
"The Forestlands investment structure gave investors very little control, but a fundamental right they had was access to financial information," Nick Kynoch, general counsel for FMA, said in 2020.
