The Financial Markets Authority has requested the High Court put 18 separate companies owned by forestry investment group Forestlands into liquidation.
The Motueka-based company has been at the centre of a long-running dispute relating to the 2016 sale of its forestry assets.
The Authority moved early last year to have $18 million from the sale of Forestlands forests put into trust to protect shareholders' interests.
The company has been at the centre of a dispute in which shareholders have complained about the sale of assets and how and when the proceeds of the sales were to be returned to investors.
Forestlands has a complicated structure in which individual companies own separate forests at various stages of growth and harvesting. The investments have been managed by companies associated with the group's sole director, Rowan Kearns of Motueka.
The FMA said the company has been slow to tell shareholders what was happening, had not maintained a share register or accounting records and consistently failed to meet reporting requirements.
"The FMA is bringing this application because at this point it has no confidence in the director to manage the relevant interests appropriately between the director, the entities associated with him, 'B' shareholders and creditors of the Forestlands companies," the Authority said in a statement.
"The application to appoint a liquidator will bring independence and certainty to the process and enable the liquidator to determine the appropriate way forward for releasing Forestlands funds to investors."
Last week the High Court approved a request by 10 of the Forestlands companies to pay $1.56m in tax and interest to Inland Revenue from the money held in trust, so they could avoid hefty penalties.
The FMA and the Serious Fraud Office are continuing to investigate Forestlands.
A statement from the company in March said it had been delayed in working out a system to repay investors because of the FMA's investigation.
The High Court hearing is on Thursday.