The Financial Markets Authority - Te Mana Tātai Hokohoko - has issued a warning to Evco Pacific Limited (EVCO) for failing to make the proper disclosure requirements under the Financial Markets Conduct Act 2013 (FMCA). The warning also applies to EVCO's current director, Neville Montefiore, and former directors Roger MacDonald and Christopher Nathan.
In the FMA's view, EVCO and its directors breached the FMCA by failing to provide the required disclosure to investors about an offer of shares in EVCO by its parent company EVCO International Limited during the period 27 November 2017 through to 26 March 2019. The FMA began looking into the issue after receiving a complaint from an investor.
Offerors of financial products, such as shares in a company, are required under Part 3 of the FMCA to prepare and lodge a product disclosure statement with the Registrar of Companies so potential investors can make an informed decision about the offer. EVCO or its directors did not undertake these requirements.
FMA Executive Director of Response and Enforcement, Louise Unger, said: "The purpose of the disclosure requirements is to ensure members of the public can make investment decisions with full information. The investors' ability to make informed decisions was compromised by the failure of EVCO and its directors to make the required disclosures. This warning is a reminder to all directors of companies making offers of financial products to make sure they are meeting their obligations."
EVCO International Limited was initially the sole shareholder of EVCO but on-sold about 16% of its shares in EVCO to 32 investors based in New Zealand and Australia for approximately $2.8 million.
The FMA is also of the view that EVCO and the directors have breached the Companies Act 1993 by failing to complete registration of share transfers to maintain a share register and call or hold shareholders' meetings.
Following an order made by the FMA, EVCO and the directors are required to disclose the warning on their website and in any restricted communication made or distributed by or on behalf of EVCO, the Directors, or any associated persons. A copy of the order is available below.
EVCO was established in March 2017 to manufacture coconut oil in Fiji and later considered other Pacific Island countries. The company is yet to begin operations.
