Car companies could face fines
Companies within the Optimus Group could face fines if it is found they filed false claims at the Companies Office.
Newsroom reported this week that JEVIC and VINZ, companies involved in the importation and certification of used Japanese cars have been owned by the Optimus Group since it was formed in March 2015.
JEVIC/VINZ only informed the Companies Office of their true ownership on July 24, 2017, two years after they were rolled into the Optimus Group.
In the meantime, both companies gave the Companies Office misleading declarations of their Ultimate Holding Company. In August 2015, VINZ notified the Companies Office its ultimate shareholder had changed to Japan Export Vehicle Inspection Centre Company LTD.
In July 2016, the company filed another declaration at the Companies Office, this time on behalf of JEVIC. The declaration said JEVIC’s ultimate holding company was also Japan Export Vehicle Inspection Centre Company LTD.
Both statements were incorrect. Both JEVIC and VINZ’s ultimate holding company was the Optimus Group.
Misleading the Companies Office is a serious offence. The Office must be notified of an ownership change within 20 working days of it taking place, punishable with a fine of $10,000.
A false declaration is even more serious. A spokesperson from the Companies Office told Newsroom that if proven, it can be punishable with a prison term of up to five years or a maximum fine of $200,000.
The Companies Office could not tell Newsroom whether it was investigating any impropriety on the part of JEVIC and VINZ.
The controversy involves high stakes for the industry, as the Optimus Group's companies are some of the biggest players in the New Zealand market.
Together, Japanese testing firm JEVIC, wholesaling importer Nichibo and VINZ together import and certify thousands of cars from Japan each month.
Nichibo employs 450 people in New Zealand, while VINZ employs 170 people to inspect 175,000 vehicles a year.
The three companies are separate and control different parts of the import chain, but since March 2015 they have been owned by the same Japanese company. This contravenes an international standard which says companies should not be allowed to test and certify goods in which they have a financial interest.
Editor of car review website dogandlemon.com, Clive Matthew-Wilson, told Newsroom the companies should be punished.
“It’s a rule of good governance that you don’t certify cars you have an interest in,” he said.
“The rules are quite clear: you're not allowed to do safety inspections on vehicles you have a financial interest in,” he said.
JEVIC and VINZ respond
JEVIC and VINZ have responded to Newsroom’s story.
They said that NZTA is satisfied no actual conflict of interest arose, outcomes of inspections were never improperly influenced, and public safety was never compromised.
The statement stressed that neither company is an importer cars, as they are both part of an inspection division.
However, Newsroom’s story found that the Nichibo corporation, also owned by the the umbrella of the Optimus Group does purchase and export Japanese vehicles.
Newsroom was told that because the three were separate companies it could not be said that JEVIC and VINZ certified their own cars, although they certified cars that were owned by another company within the Optimus Group, which was alleged to simply be a holding company.
This seems to be contradicted by the Optimus Group’s website, which implies the firm is something more than a simple holding company. The website contains a diagram proclaiming the group’s vertically integrated value chain.
The diagram seems to suggest the company is well aware that vehicles owned within the group's companies pass all the way along the import chain.
It also says that the vehicle testing part of the business requires “a high independency and neutrality”. A Deloitte report commissioned by the businesses and NZTA remain satisfied that no conflicts of interest have arisen.
A spokesperson for JEVIC and VINZ told Newsroom that risk management procedures are “commercially sensitive” but that there was a full conflict of interest management plan in place. This included staff contracts which mandated they report “any attempts or perceived attempts to influence the outcome of an inspection”.
The Optimus Group is listed as the Ultimate Holding Company of several other auto firms in New Zealand, from car rental firms like Universal Rental Cars Ltd. to several car finance firms.
Spotlight on NZTA
The story has put the spotlight on NZTA which has recently been in the headlines for mishandling the process by which it certifies vehicle testers.
It confessed to an approach that relied too heavily on the industry self-regulating.
Transport Minister Phil Twyford said at the time that the agency was also underfunded.
He described the failure as “a regulatory lapse”.
NZTA has commissioned law firm Meredith Connell to investigate the 850 cases where the agency might not have appropriately certified a company’s compliance with safety standards.
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