The Financial Markets Authority has filed 111 criminal charges against an individual in relation to the Forestlands group of companies, for allegedly breaching laws covering disclosure and financial record keeping.
The authority (FMA) claims the unnamed person failed to keep proper accounting records, share registers, file financial statements, and misrepresented the financial position of companies.
The Motueka-based group was put into liquidation in 2018 as the FMA followed up on shareholder complaints of not being to get information about the 2016 sale and access to the $23.5 million proceeds.
The FMA's intervention secured $18m being put into a trust, and the appointment of liquidators who have been managing the distribution of funds to hundreds of shareholders.
The Forestlands group had a complicated structure in which 18 individual companies owned separate forests at various stages of growth and harvesting, totalling 1934 hectares on the east coast of the North Island and the south west of the South Island.
Investors subscribed for shares worth $2.75m in each company, and were given a class of shares which offered dividends and payouts on winding up but no voting rights.
The FMA's general counsel, Nick Kynoch, said shareholders had been left in the dark and businesses had a duty to maintain proper records and accurate financial statement.
"The Forestlands investment structure gave investors very little control but a fundamental right they had was access to financial information. We are seeking to hold this conduct to account, however we recognise shareholders may be left out of pocket."
Some of the charges have a maximum penalty of five years in jail and or a fine of up to $200,000.
The Serious Fraud Office has also investigated the collapse of the group.