Apple Fields directors work on late financial statements

The two directors of property company Apple Fields, founded by the late Tom Kain, are making progress on filing three years of financial statements after they were found guilty of breaching the Financial Reporting Act.

The sentencing of directors Justin Prain and Mark Schroeder has been set down for May 4.

Schroeder said on Friday that Gordon Stewart, the director and owner of NIL (Noble Investments), which is developing the stalled Noble Village in Yaldhurst, had handed over the accounts so they could be used to complete Apple Fields accounts.

The case was taken by the Financial Markets Authority against the two directors for not filing accounts for the three years to September 2011-13. Principal shareholder of Apple Fields Tom Kain died on December 29 2013.

‘‘To put it really simply we were quite pleased they (FMA) have a win and we don’t have a loss,’’ Schroeder said.

May 4 was not a sentencing but ‘‘a deliberation of any penalty for the breach if there is to be any,’’ he said. The fine for a breach is up to $100,000.

He was in discussions with FMA and Apple Fields financial statements were being prepared and an auditor was in place.

It was going to be resolved, he said. ‘‘I’m hopeful of a spirit of co-operation between us.’’

Sorting out the administrative side of the Noble Village development was the biggest thing on their plate. The court judgment in the case said the development had been stalled by caveats and court appeals and cross appeals from parties who had contracts to buy in the subdivision and owned adjacent land that was to form part of the development.

Schroeder said they were making progress on these issues but could not say much at present because it was quite sensitive.

They would make an announcement and tell shareholders when they could.

The decision of Judge Emma Smith of finding Prain and Schroeder in breach of the act was released in mid February. The full judgment was released this week.

The court did not accept the directors’ defence, available under the act, that they took all reasonable and proper steps to ensure the financial statements and auditor’s reports were filed with the Registrar of Companies.

The judge said the directors accepted advice from the company’s accountant that Apple Fields could not file accounts because NIL’s accounts had to be incorporated because it was a ‘‘deemed subsidiary’’ and the owner of NIL would not supply them.

They should have checked the correctness of that advice other professionals.

Under the act the directors could have submitted incomplete accounts to the auditors with a clear explanation they believed NIL accounts should be incorporated but they were unable to obtain them, but they did not want to do that, the judge said, because they wanted to avoid a ‘‘qualified opinion’’ from the auditors.

Apple Fields was a substantial company with about 1000 shareholders and share capital of $39.5m and directors must have know shareholders should have timely and accurate information about the company’s financial position, the court said.