W(r)ONG on WANG

The pertinent question I have raised regarding the mysterious May Wang is her 40/30/15/15 share split for the 80% of UBNZ companies where it is claimed by her lawyer Kerry Knight that she is holding the shares in trust for several New Zealand businessmen.

That is, May Wang personally does not own the UBNZ entities as reported in several media outlets.

Here

UBNZ is 80 per cent-owned by May Wang, a Chinese national and New Zealand citizen who is fronting the group which aims to raise $1.5 billion to invest in New Zealand dairy and processing assets. W(R)ONG. She doesn't own UBNZ - she is holding the shares in trust according to Knight.

Here

Her company UBNZ Trustee Ltd was the first registered buyer of the NuGen Farms (Robert Crafar) properties bought last month. However, titles were immediately transferred to UBNZ Assets Holdings, of which she owns 80%. W(R)ONG.

Here

Auckland woman May Wang owns 80% of UBNZ and has interests in more than a dozen local businesses, several of which have failed. W(R)ONG.

I can explain this again using companies office documents:

UBNZ Trustee Limited

- this shows two changes in share parcels, one at 16th November 2009 and the second at 22nd January 2010. The first change shifted the companies from WANG to the British Virgin Island companies Quality Index Limited, Wonder Effort Limited and Progress Great Limited - as I mentioned the other day, typical nonsensical names asked for by Chinese clients based on their Chinese meaning and dippy things like feng shui.

The second change moved the shares from the BVI companies back to Wang. It looks however like Wang has kept 15 shares to herself, the Companies Office makes reading totals difficult as it will not necessarily identify if shares are being held by the owner or as trustee for a trust.

This is complicated further as the Chinese have an unusual view of trusts. Quite often they say a share is being held for someone without the formalities of the trust being completed - in the case of a share, the transfer.

May Wang

The next set of documents are for UBNZ Funds Management Limited

On 16th November 2009 Wang moved 10 million shares from UBNZ Trustee Limited to each of Quality Index Limited (40%), Wonder Effort (30%), Progress Great Limited (15%) and what looks like herself 15%.

Then on 22nd January 2010 she moved the following tranches, of Quality and Wonder's shares were moved to her as were Progress' several minutes later.

May Wang 2

So I guess one question is why did Wang move ownership offshore then just several months later back onshore into her own name? When dealing with land in New Zealand, owning an offshore company is entirely redundant given the land is situated in New Zealand and will therefore be taxed in New Zealand and subject to New Zealand law. You cannot move the land.

The rules as MSM are finding are quite complex and based on the lack of hard evidence on Wang, and other mystery player it is hard to estimate what is happening here. OIO rules deem the following an "overseas person" :

(c) a body corporate (A) if an overseas person or persons have—

• (i) 25% or more of any class of A's securities; or

• (ii) the power to control the composition of 25% or more of A's governing body; or

• (iii) the right to exercise or control the exercise of 25% or more of the voting power at a meeting of A; or

That is while the BVI companies were shareholders, the UBNZ companies were overseas persons.

Also now Kerry Knight has stated Wang is the trustee, we can look at the trusts themselves been overseas persons

a trust (A) if—

• (i) 25% or more of A's governing body are overseas persons; or

• (ii) an overseas person or persons have a beneficial interest in or entitlement to 25% or more of A's trust property; or

• (iii) 25% or more of the persons having the right to amend or control the amendment of A's trust deed are overseas persons; or

• (iv) 25% or more of the persons having the right to control the composition of A's governing body are overseas persons; or

What is interesting with this is that it allows Wang to be the trustee and have power of the "trust", however if she is holding the shares for those who then are doing the same for example, Chinese interests, they are caught under the control (through for example the use of a trust protector over Wang in the deeds) and entitlement sections of the Act.

That is, what if Wang is holding the shares in trust for Mr X (a New Zealand "businessman") who then has an option arrangement or another trust arrangement back with a foreign person? That is double layering of the New Zealand ownership?

Section 8 of the Act covers this behaviour which is deemed anti-avoidance provisions. The website itself itself clearly sets the intention of this section:

Situations of control or direction may or may not be clearly documented. The circumstances of the direction or control need not infer any unlawful or dishonest intent - the direction or control may result from a perfectly lawful and reasonable arrangement.

Examples of direction or control include:

• management agreements
• business relationships
• social obligations, and
• threats.

As I have stated Chinese have an unusual definition of trusts as we know them.

One of the more interesting revelations from HoS at the weekend was that Wang is under scrutiny from the IRD

The Herald on Sunday has learned that Inland Revenue has been probing her tax details and business affairs for a few years.

Wang, who has New Zealand citizenship, is fronting a bid to buy the Crafar farms that went into receivership last year.

Chen Fashu, one of China's richest men, is backing the bid.

This raises the interesting question of stripping back that 80% of UBNZ companies and finding out how she was using these offshore companies, and for what ultimate purpose and who is the ultimate beneficial owner of each (after you have peeled off all the layers above).

And from the IRD perspective how she returned the shareholding of those British Virgin Islands companies, because if they are owned by New Zealand businessmen or herself they need to be declared to the IRD and any income gained from them returned in New Zealand.

Again May Wang raises far more questions than answers. The OIO may take a wee while to work this one through properly.