United States authorities plan to indict a New Zealand company involved in selling North Korean arms to Iran, sources linked to the investigation say.
Authorities are trying to track down those involved using a labyrinth of thousands of Auckland companies registered to an office at 369 Queen St.
Most of the companies involved were set up by Vanuatu-based GT Group Ltd, controlled by New Zealand accountant Geoffrey Taylor and sons Ian and Michael, stuff.co.nz reported.
Thai authorities will be interrogating crew members of an Ilyushin Il-76 cargo plane, which was intercepted by during a refuelling stop in Bangkok on December 12.
The plane, which had been leased by a New Zealand-based company, SP Trading Ltd, was carrying 35 tonnes of North Korean weapons to Iran.
“Indictments are coming and they will be big,” a source said.
New Zealand police investigating the New Zealand links to the weapons shipment have declined comment, and referred queries to the Ministry of Foreign Affairs and Trade (MFAT).
Asked to what extent the investigation was looking at flaws in New Zealand companies' registration which allowed local entities to be used as a front in arms deals, MFAT would only tell NZPA: "inquiries are on-going".
Members of the five-man crew – four from Kazakhstan and one from Belarus – are to be interrogated today and again on January 18. The plane's captain, Ilyas Isakov, has said he planned to deliver the cargo to the Ukrainian airport Borispol, the Kazakhstan Today news agency reported.
The crew have so far denied any knowledge that their cargo included explosives, rocket-propelled grenades and components for surface-to-air missiles.
The investigation has not only raised questions about the lengths arms smugglers take to hide their identities, but the extent to which New Zealand companies registration system fails to show the real beneficial owners of companies.
The Ministry of Economic Development has defended its company registration system in the wake of claims that it was open to being exploited for money laundering or terrorist activities.
The ministry's business registries manager, Justin Hygate, said the system was robust, but the New Zealand branch of the anti-corruption organisation Transparency International said the case raised questions about the stringency of company incorporation laws.
"The issues ... are obviously of concern, especially the transparency of processes which allow companies to be formed without confirmed identification of directors and shareholders," Transparency International's executive officer in Wellington, Paul Browne told NZPA.
There should be processes "that would send alarm bells with this number of companies being formed with offshore directives and without any clear reason for their existence", he said.
A New York business magazine, Barrons, this week reported the New Zealand weapons shipment involved the same network of shell companies flagged by a Wachovia Bank officer in 2008, which reported suspicious financial activities.
It said the Wachovia wire transfers and the arms shipment were conducted under the names of corporations owned by VicAm (Auckland) Ltd., a New Zealand corporation provided by consultants GT Group, and based in the South Pacific island of Vanuatu.
VicAm has also been linked to sales by the state oil company of Azerbaijan: Sumato Energy Group Ltd, an Auckland company owned by VicAm has bought billions of barrels of oil in recent years. The destination of the oil shipment was not disclosed.
After SP Trading's cargo of "oilfield equipment" was revealed to be explosives, rocket-propelled grenades and computerised missile launchers, GT Group issued a statement from Vanuatu saying that it had formed SP Trading at the request of a "professional client" in Britain. It set up the company with VicAm as nominee shareholder and a woman named Lu Zhang as nominee director.
SP Trading said it knew nothing of the weapons and its employees, associates and corporations had no knowledge of SP Trading's activities and "are in no way involved with the shipment of any items of any kind, at any location and by any means".
source: newshub archive