German millionaire Kim Dotcom was aware of pending court action against him in Hong Kong when he lodged his application to be a New Zealand resident, but Hong Kong law gagged him from telling Immigration New Zealand, official documents show.
He was convicted for share-trading offences in December 2010, a month after being granted New Zealand residency. The convictions could have seen him deported, but Immigration New Zealand agreed with Dotcom's immigration agent that the convictions were minor and did not indicate a pattern of offending.
In July 2011, however, then Associate Finance Minister Simon Power derailed Dotcom's application to buy $36 million worth of property because of his criminal history, including hacking and insider trading.
"By their repetition, and the fact that they are essentially 'dishonesty' offences, I consider that the pattern of this behaviour goes to the character of Mr Dotcom,'' Mr Power said in his decision to fail Dotcom on the test of good character.
The Government is now investigating the apparent inconsistency between the "good character'' tests for residency and for the purchase of sensitive land.
Dotcom first became aware of his potentially criminal actions in Hong Kong in November 2009. The following month he notified Hong Kong authorities voluntarily, noting that the breaches may not have been discovered without his disclosure.
In June 2010 he lodged his NZ residency application. Two weeks later he was told by Hong Kong authorities that he was being officially investigated.
The Securities and Futures Commission in Hong Kong told Dotcom the investigation was confidential.
"You must not disclose anything about this investigation to anyone. It is a criminal offence to fail to comply,'' the SFC wrote to Dotcom.
Dotcom was permitted to tell Immigration NZ of the case once he was convicted of failing to publicly disclose the purchase of shares on the Hong Kong stock exchange.
His immigration agent, David Cooper, told Immigration NZ that Dotcom was left in an "invidious position''.
"He was resident in Hong Kong at the time and obliged to comply with local law.''
Mr Cooper told Immigration NZ it would be a "gross over-reaction'' to deport Dotcom, given the minor nature of the offending.
"This latest conviction does not suggest a pattern of offending. In fact, it supports the earlier claim that Dotcom is a reformed individual by fronting as soon as he became aware the law had been breached in Hong Kong.
"He could have quite easily not made a voluntary disclosure to the authorities in Hong Kong.''
Immigration NZ agreed and decided not to deport.
Dotcom was fined $4250, including covering the cost of the investigation - barely a dent in his fortune; Dotcom's 12 cars were worth a total of $3.2 million, and his annual wage bill for New Zealand staff alone was $1.1 million.
Documents released under the Official Information Act also reveal that Dotcom failed to disclose previous convictions the first two times he came to New Zealand in 2008 and 2009 because "Dotcom arrived by private jet and one of his staff completed the arrival card on his behalf''.
Dotcom faces multiple charges of copyright infringement, internet piracy and wire fraud. He is on bail in Auckland while American authorities seek to extradite him.
- By Derek Cheng of the New Zealand Herald
