Thursday, 2 July 2015

The China Waste Corporation fraud scheme

Investorlink Group is an Australian criminal organization specializing in intermediating international securities fraud and market manipulation, as described previously in this blog post. The company mainly helps with the listing and deliberate ramping of Chinese fraud schemes on the Australian stock exchange. Such fraud schemes need no actual assets or operations before revaluation by the criminal cartel into ASX-entities valued at billions of dollars. Investorlink recently helped launch yet another revaluation fraud on the ASX, by backdoor-listing and ramping China Waste Corporation (CWC.AX).

China Waste Corporation purportedly is an environmentally friendly waste management company, through its interest in Cayman based shell company Harvest Champion and its subsidiary China Urban Mining Holdings Limited. But as the prospectus for the backdoor-listing admitted, none of these companies actually have any operational history whatsoever, merely "planning" and "aiming" to conduct business. According to the prospectus, the only asset held by these companies was purportedly $3m cash, to be acquired by issuing 628m shares of CWC in the listing.

A small investment cartel now controls almost all CWC shares and manipulates its share price. According to disclosure documents, the top twenty shareholders hold more than 97% of shares. Immediately after listing, the "market" cap of CWC was set at $230m by the criminal cartel controlling its share price. According to the ASIC, this was not market manipulation at all, but rather a magical market mystery. According to ASIC, the overnight transmogrification of $3m cash into a $230m asset was just a wonderful occurrence, a miraculous event that needs not be investigated by the regulator. More recently, this blatant fraud scheme has been ramped to a "market" cap exceeding $300m, and ASIC still does nothing about it.

There are several uses for inflated ASX shares. The criminals freely admit one purpose of these ridiculous listings is to gain "credibility". But is "credibility" something that ASIC should be willing to sell? Furthermore, manipulated shares can be used as collateral for borrowing, or used by criminal fund managers to misstate fund performance and fraudulently extract performance fees. Deliberately inflated smallcap shares can also be used to defraud the significant investor visa program, whereby corrupt Chinese officials and other criminals can buy permanent residency in Australia. Recent changes to this program have been designed to provide a boon to organized crime syndicates such as Investorlink.

6 comments:

  1. very interesting. Have any more recent stories caught your attention?

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  2. i've had a closer look at CWC. The value of the assets that the CWC controls through its JV with government owned entities (CAS and CECEP) would be approx RMB1billion (AU$200m odd). That constitutes landfill sites, licences and the amount spent to date to become the key provider of HWM in those regions. It's very hard to replicate their business, and would take many years to do so. I think that's how the value of CWC is calculated. There is no point looking simply at their cashflow/earnings. That's a mistake that an accountant might make. You have to look at the cost to replicate their assets and market share.

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    1. Hahaha sure sure! It's those magical "deals", entered into by a company whose only asset is $260K cash, that explains the half billion "market" cap of the CWC scam. How nice of the counterparties to gift CWC such a windfall, sounds legit! Except the empty shell had a "market" cap of hundreds of millions even before these magical "deals".

      In reality, the CWC scam shares are worth zero, zilch, nada. A criminal cartel holds 98% of the worthless shares and manipulates the "market" price. Investorlink's directors should be jailed for fraud.

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  3. interesting CWC got suspended on Friday...what's your reading of the announcement? Maybe the ASX finally started reading your blog haha

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    1. Oh the ASX/regulators are well aware of the information in my blog, have been for years, TheCannon. This is not an issue of incompetence or ignorance, it's an issue of unapologetic dereliction of duty and unrepentant criminality.

      Now, after years of allowing the most ludicrous crap revaluation frauds to foul the ASX, they have become nervous enough to try and close the stable door. See for example the consultation paper on new admissions:
      http://www.asx.com.au/documents/rules/consultation-paper-listing-admission-rule-changes.pdf
      This is not in any way meant to reduce fraud, but merely force the most glaringly obvious scams to cover up better.

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