Bermuda incorporated Australia China Holdings (AAK.AX) is yet another ASX-listed investment company featuring crossholdings and related party transactions, with several of its subsidiaries showing up as top twenty shareholders of the company. AAK claims operations in "trading, property investment, hotel management and other projects in environmental businesses", and has 3.5bn shares outstanding, the result of decades of share issues and ramps. These shares currently trade at a "market" price between $0.001-0.002, giving AAK a market cap up to $7m.
AAK offers Australian investors an opportunity usually only available from Nigerian princes. According to its latest annual report, AAK has assets of $73m in the form of a deposit paid on Mongolian farmland. Now AAK shareholders just need to pay another $1m in "registration fees", and they will own farmland worth $73m! (AAK's Malaysian auditor carefully qualified its opinion as to the "recoverability of the deposits", AAK's only asset.) This invaluable farmland has so far provided zero actual cash flow for AAK, despite AAK apparently having leased the farmland to the ungoogleable "Beijing Shuimu Zhongtian Institute of Horticulture Sciences" for $2m a year in 2011. In fact, AAK mysteriously had no operating cash inflows at all for the last five years.
That's OK though, because operating cash flows are not necessary for securities fraud. AAK has an ASX-listing and sports a "market" value endorsed by ASIC, and this in and of itself gives AAK utility for revaluation fraud. In December AAK announced it has forged a strategic agreement with an unnamed Chinese investment group with strong backing from "pear fund managers" (sic), to issue more shares.
The unnamed investment group and AAK will obtain financing, invest in each other, and place shares together. The related party is about to start again, with ASIC proudly chaperoning.