Clark David: Companies and Limited Partnerships Amendment Bill — In CommitteeText is incorporated into the Bound VolumeClark David: Companies and Limited Partnerships Amendment Bill — In Committee[Sitting date: 17 June 2014. Volume:699;Page:18603. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):I do look forward to hearing those questions answered and the Minister of Commerce was halfway to his feet. I was quite happy for the Minister to speak first because it would be very interesting to hear why those judgments had been made why that serious rewrite in Supplementary Order Paper 465 has been deemed appropriate at this late stage. I too was not on the Commerce Committee so I am not completely privy to what happened there. Perhaps the select committee chair will enlighten us in due course as to the process that was followed because it certainly is strange.For the benefit of viewers at home who are following this debate keenly I will hold up the original bill which is about this thick and the Supplementary Order Paper which is slightly thicker. There is actually more in the changes than there is in the original bill if you look at it in those simple terms. It is a weighty tome and there has been a substantial rewrite of the bill at this stage. It may be that some of those points are correct. It may be that the changes introduced in Supplementary Order Paper 465 are indeed appropriate as Mr Parker has reflected on from his own experience and in terms of the nature of limited liability companies—the desire to make sure that the risk-benefit ratio is correct. But changing those tests in such a significant fashion surely warrants an explanation from the Minister. I was pleased the Minister was halfway to his feet so I expect we will get an explanation shortly.The Companies and Limited Partnerships Amendment Bill as a whole addresses some important issues and I think it is vital that we cover those off. It is a call for transparency and finding out for the Registrar of Companies who indeed is not complying with the Companies Act. It gives new powers to the registrar and these include the power to flag companies on the register that are under investigation. This has got to be a good thing. It also lays out the consequences and that too is a good thing. The removal of companies from the register if they provide inaccurate information or persistently fail to comply with the Act is something that should be allowed for and it is indeed in this bill. The bill also aims as we had it first off to make similar changes to the Limited Partnerships Act so that those misusing New Zealand companies cannot avoid the new regime by registering as a limited partnership instead. That is something we try to do in this Parliament all the time—anticipate the unintended consequences of legal changes and to head them off at the pass.The bill aims to better align the Companies Act with the Takeovers Code to ensure that shareholders understand the effect that changes in company control will have on the value of their shares and that this is another transparency measure. We all know that markets are about information sharing. That is the fundamental useful function of markets—they share information so that people can make investment decisions and so that capital is efficiently used. We all know that markets if they are properly regulated can work in the interests of people or they can serve their own ends often not in the interests of people if they are improperly regulated. This provision is aimed at aligning the Companies Act with the Takeovers Code. There are also further consequences outlined in the bill such as criminal offences for directors who commit a serious breach in their duty to act in good faith. As we have seen the tests around those are weighed up anew.This bill is one that Labour will support but we are very keen to hear from the Minister as to why such dramatic changes have been made to this bill. It is some time since we last debated it. New Zealand enjoys an international reputation as a trusted place to do business. It is important that we have the legislation correct. It is important that the reputation that we have as an easy place to do business is maintained. It is important that New Zealand is not exposed to bad media about using shell companies and other vehicles for avoiding tax. Let us not forget though that this does not seem to have been that much of a priority for the Government since indeed this bill has languished at the bottom of the Order Paper for some time both at first reading and at second reading. It is only at this late stage that we are getting these changes.The year before last New Zealand along with Russia was struck off a prestigious European Union banking and corporate white list over the country’s weak ministry—