The Financial Markets Authority (FMA) of New Zealand 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.

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 also considers 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.