The Australian Securities and Investments Commission (ASIC) has obtained interim orders in the Federal Court in Adelaide stopping China Environment Group (CEG) and its director, John William Ullmann from selling CEG shares and providing financial services in Australia.
The regulator has alleged that CEG entered into an agreement with Lucky Pearl Investments Limited for the sale of CEG sales.
However, it was found that Mr Ullmann's personal shares in CEG had been marketed to Australians by two companies associated with Lucky Pearl, Anova Corporate Services Limited (Anova) and Great Wall Capital Limited (GWC). Both companies used addresses in Shanghai, China.
Neither CEG, Anova, Lucky Pearl, GWC or Mr Ullman held an Australian financial services licence.
ASIC alleged Mr Ullman, as the sole director of CEG, acquired 100 million shares in CEG for one US cent each. Investors were then sold Mr Ullmann's shares for one US dollar each.
"Promotional materials prepared by Mr Ullmann and CEG were presented in a manner so as to deceive investors into believing that their money would be directed to CEG to enable it to develop clean air technologies in China," ASIC alleged.
"In fact, 80 per cent of the money was paid as commission to Lucky Pearl and the balance paid to Mr Ullmann and another company believed to be associated with Lucky Pearl.
"Many of the persons who purchased CEG shares from Mr Ullmann had previously acquired shares marketed by Anova and GWC in other companies, including Hydro Solutions Asia and Delmedica Investments Limited."
The matter has been scheduled for a directions hearing next Thursday 28 March.
