The former CFO of a listed company has been sentenced to over three years’ imprisonment after pleading guilty to market manipulation and fraud.
In a statement, ASIC said Zhonghan Wu, former chief financial officer of the ASX-listed Traditional Therapy Clinics (TTC), had been sentenced to one year and 10 months in prison for market manipulation, and two years and six months for fraud, in the District Court of NSW.
Mr Wu has been ordered to attend community corrections for an intensive correction order assessment on 2 July in the District Court.
“An ASIC investigation found between 8 September 2015 and 30 November 2015, Mr Wu carried out multiple share transactions in TTC shares using four different trading accounts. The trading had the effect of creating an artificial price for TTC shares on the ASX,” ASIC said.
“When trades in one trading account were rejected for suspicious trading, Mr Wu would use another trading account to continue trading in TTC shares.
“Mr Wu’s trading occurred immediately after TTC’s listing on the ASX, following an IPO in August 2015 that raised approximately $15m through the issuance of 30 million TTC shares at $0.50 a share. Mr Wu carried out the transactions in order to maintain the TTC share price above the IPO issue price of $0.50 per share.”
ASIC said Mr Wu had also been found guilty of fraud after he obtained loans from CBA of $390,000 in 2012 and $260,000 in 2015 to purchase various properties, for which he provided false and misleading documents.
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