Traditional Therapy Clinics forced to answer ASX questions as back room shemozzle continues
Health and wellness company Traditional Therapy Clinics has been forced to answer questions from the ASX as to why it lost two directors and a company secretary in the space of three days.
The ASX is also asking Traditional Therapy Clinics (ASX:TTC) why it has been unable to post its half-year results.
TTC’s stock was suspended on September 3 because it had failed to lodge its half-year review.
The same day, it announced that two of its Australian directors, Geoff Ross and Christian Drysdale, had resigned, and that it was experiencing delays in finalising its half-year review “due to an audit confirmation that remains outstanding”.
The Corporations Act states that a public company must have at least three directors, at least two of which must reside in Australia.
Two days later, on September 5, TTC announced that its company secretary, Chen Chik Ong, had also resigned.
To paraphrase Oscar Wilde, to lose one director may be regarded as a misfortune. To lose two, plus a company secretary, looks like carelessness.
On September 6 the ASX asked TTC to explain the resignations and the delayed audit.
The company’s response was finally posted to the ASX after the market closed yesterday, saying that Mr Ross and Mr Drysdale had urged the company’s auditors to “take additional steps to obtain new bank confirmation”, as the original bank confirmation was identified as irregular.
Donald Du, TTC executive director, told the ASX that Mr Ross and Mr Drysdale subsequently resigned as “authorisation from the company management for the new bank confirmation was not forthcoming”.
It then turned into a shemozzle. On September 1, Mr Ong, the company secretary, asked Mr Ross about the status of the audit; Mr Ross said he would discuss with Mr Drysdale then report back to Mr Ong in the afternoon.
But the next correspondence that Mr Ong received was a resignation letter from the pair of directors.
“Mr Ong advises the company that he resigned because of the sudden departure of the independent directors without warning or discussions,” Mr Du said in his response to the ASX.
With regards to the missing half-year review, TTC said the auditors suspected the original bank confirmation was “provided without authorisation by the company management through an irregular procedure”. It added that the process is being redone and may take seven days to implement.
TTC said the auditors had not expressed any preliminary concerns about the company’s financial position.
Dr John Saunders has been invited to be the Australian resident chairman of the board, and a second Australian resident direct is being sought.
Traditional Therapy shares are down 80 per cent in the past year.