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ASIC finds ‘irregularities’ in China-linked company

ASIC finds ‘irregularities’ in China-linked company

ASIC

ASIC has applied to wind up a China-linked company that was once listed on the Australian stock exchange over “irregularities” in bank records and concerns that it lacks Australia-based directors.

In a statement, the companies regulator said that it has applied to the Federal Court to wind up Traditional Therapy Clinics Limited (TTC), which provides traditional therapeutic massage treatments at clinics in China.

ASIC said that its move was the result of a number of concerns it holds about the company, alleging that it:

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• Has no directors residing in Australia and no company secretary
• Failed to lodge its half-year review for the period ending 30 June 2018
• May have improperly diverted or dispersed investor funds
• Had irregularities in its bank records received from China-based management
• Did not provide authorisation to external auditors to investigate these monies with the relevant Chinese banks

A hearing has been scheduled for 22 February 2019, at which ASIC will be seeking to appoint liquidators from Ernst & Young.

According to ASIC, the company has its registered office in Perth, and is a franchisor and owner of therapeutic and wellness clinics in China.

ASIC also said that TTC had been listed on the ASX in September 2015, following a $15 million raising through a prospectus. But its shares were suspended exactly three years later over its failure to lodge a half-year report. Administrators at Pitcher Partners were subsequently appointed by the company’s board on 16 November 2018.

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Contrary to ASIC’s assertions, TTC’s website lists an address in Sydney’s CBD and claims to have a Sydney-based chairman and a non-executive director, with a managing director and a CEO based in China. The website also states that its company secretary is Nicholas Ong.

It is unclear when the website was last updated.

A message has been left on the number supplied for Mr Ong, and TTC has also been emailed for comment.

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