Lengthy prison sentences for breaching Companies Act prohibition

David Blake and Lance Ryan have both been sentenced to more than two years in prison after being found guilty of multiple breaches of the Companies Act and Crimes Act respectively.

Both had been involved in the setting up and management of Hygiene Foundation Ltd, a company that purported to provide hygiene certification to other businesses before going into liquidation in 2013 with over $700,000 in claims from creditors. 

At the time David Blake was prohibited from taking part in the management of a company due to his previous convictions for having managed a business whilst an undischarged bankrupt.

“These individuals have a history of taking advantage of the public’s commercial goodwill, and breaching regulatory requirements in place to protect the public from incompetent business operators just like them,” says Registrar of Companies Ross van der Schyff.

“Our investigations found that they were taking active steps to hide David Blake’s involvement in the companies from the authorities in an attempt to avoid being detected for acting in breach of his prohibition.

“Their incompetence in running this business meant significant financial losses to the companies’ creditors, but also, in some instances, significant emotional harm to the people that they dealt with.

“Limited liability companies help New Zealanders every day in bringing their innovative ideas to market, as they create an opportunity for people to open businesses and take risks. However as we’ve made clear in the past, company directors must comply with their legal obligations.

“This kind of offending is an affront to the wider community who conduct business honestly and do meet all their obligations. We are pleased with these sentences, as they reflect just how seriously the Companies Office takes this kind of behaviour.”

David Blake was convicted of two charges of managing a company while prohibited (one of which relates to a second company Q Technology Ltd), and one charge for promoting a company while prohibited, and sentenced to two years and four months imprisonment.

David Blake ran the companies with assistance from his wife, Hayley Blake (also known as Heesoo Byun or Heesook Byun) and Lance Ryan. Hayley Blake and Lance Ryan were also recorded on the Companies Register as the directors of these companies, and also controlled the shareholdings for these companies.

Lance Ryan was convicted of three charges under the Crimes Act for being a party to David Blake’s offending and was sentenced to two years and two months imprisonment.

As a result of these convictions, both defendants are prohibited from promoting or taking part in the management of a company under s382 of the Companies Act 1993 for a further five years. Both are also undischarged bankrupts, and as such they are prohibited from taking part in the management of a business under the Insolvency Act 2006.

David Blake is also known as David Colin Hughey, or David Morgan-Blake. Lance Jack Ryan is also known as Lance Jared Thompson, or Michael Darren Gibbs.

In the 2016/17 financial year, the Registrar of Companies prohibited 38 people from being directors of limited liability companies.