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.