Some people can really get carried away at a bargain sale.It costs very little to register a company in NZ, just NZ$100 (about US$66). The idea behind this is to encourage entrepreneurship, but Mike Henry, founder of Mike Henry Travel Insurance Limited, seems to be trying to take advantage of the NZ government's benevolence in a big way.
Mike Henry is listed as a shareholder and/or director in a complex web of over 30 companies listed with the New Zealand Companies Office. Total investment: around NZ$3,000. Many of these companies have nearly identical names and less than a handful appear to be viable business concerns. Although Mr. Henry claims to be one of the largest insurance product providers in the region, the numbers just don't support those claims. Total gross revenues (after commissions paid) of the so-called "Mike Henry group of companies" are estimated at less than US$5million, and net income is estimated at well under US$1million.
If most of the Mike Henry companies are shells, then what's going on here?
One aggrieved former Henry business partner claims that Henry issued shares to him in one shell company, but ran the business through another, and then Henry claimed that the company was bankrupt at the time Henry decided to get rid of him.
Another possible explanation is that Henry likes to crow that he's chairman of 30 companies, no doubt to create an illusion of credibility. For those not familiar with Henry's accounting methods, the sheer volume of companies gives the appearance that the so-called "Mike Henry group of companies" is a massive conglomerate, when in fact the only thing massive about this so-called group of companies is Henry's efforts to make it appear that way.
Case in point: Mike Henry Travel Insurance Limited. Sales of NZ$45million certainly sounds impressive, but that’s only part of the story. According to industry insiders, 46% of each sales dollar goes to pay commissions to travel agents, and 50% goes to the insurer. What's left? Just 4%, or NZ$1.8 million (US$1.2million), out of which all the overhead has to be paid, leaving maybe 10 cents on the dollar or an estimated US$120,000 in net income.
Out of the 30-odd companies in Henry's so-called "group", only about 5 are estimated to earn any profit, and all are in similarly low-margin businesses. It therefore comes as no surprise that Henry was dabbling in things like importing rocks from Africa to sell at the Matopo Gallery.
An examination of NZ Companies Office records indicates that Mike Henry frequently registers and de-registers companies or changes the names for no apparent reason, often using his longtime accountant, Philip Judge, of Auckland-based HLB Wylie McDonald, to file the paperwork. Mr. Judge is listed as a shareholder in some of the Mike Henry-controlled entities, including Mike Henry Travel Insurance Limited, a potential conflict with his auditing role.
Following is a list of NZ-registered companies naming Mike Henry as a director. You can find the same list if you go to the NZ Companies Office site and do a director search. Run a name search on any of the companies and you can see any name changes, director changes, and examine all documents filed in connection with that company. Be sure to check the list of "struck off" companies (Matopo Gallery appears there). Contrast this with a major corporation like Microsoft, which has only one company registered, and you will realise that this is something the IRD should have a closer look at.
Multiple companies dealing with the same business are grouped together
• Mike Henry Travel Insurance Limited
• MH Group Holdings Limited
• Henry Corporate Trustee Limited
• Henry Calder (International) Limited
• First Rescue and Emergency (NZ) Limited (a.k.a. First Assistance)
• Inbroke Corporation Limited
• MH Inbroke Limited
• Cover-More Insurance Services (NZ) Limited
• CMAC Limited
• CMAC Injury Management Limited
• Claims Management and Consultanty Limited
• International Claims Management Limited
• Driveright Limited
• M H Driveright Limited
• Interglobal Limited
• Interglobal (South East Asia) Limited
• Interglobal Insurance Services Limited
• MH Interglobal Limited
• Global Insurance Limited
• Global Healthcare Limited
• Global Healthcare (Japan) Limited
• Henry Thomson Holdings Limited
• Premium Group Marketing Limited
• Premium Group Holdings Limited
• Insure Direct Limited
• Timtech Chemicals Limited
• Timtech International Limited
• Travel Wizard Limited
• MH Wizard Limited
• ICM Limited
• M G A Insurance Services Limited
• Net Sentry International Limited
• MH Management Services Limited
