TTC calls in administrators after failing to get Chinese banking past auditors
Health & Biotech
Health & Biotech
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After months of ASX queries, delayed accounts, and a rotating boardroom door, Chinese wellness company Traditional Therapies Clinics has called in the administrators.
The company (ASX:TTC) appointed two directors, Grace Xi Zhang and Tiger Yu Tang, and Pitcher Partners’ Daniel Johannes Bredenkamp and Bryan Kevin Hughes as voluntary administrators.
The company has been bedevilled by problems of its own making since about September last year, when the ASX began querying whether it was having problems repatriating money from China.
We can get money from China any time, really
The company always denied there was a problem repatriating money “for dividends”, which it had never agreed to pay, so claimed there was nothing to see here.
But while it claimed to be thinking about moving $830,000 out for “growth initiatives”, it’s not clear whether they actually tried.
But in April this year, then-chairman Geoff Ross put the lie to that claim, telling the AFR that they were in fact having problems getting cash out of China, and that was why they couldn’t pay a dividend in 2017.
After that the Traditional Therapies story began rapidly unravelling from about September, when it couldn’t get its accounts past auditors and therefore couldn’t release half year accounts.
The company fessed up to the ASX that the problems were around their bank confirmation, a process that proves a company has access to sufficient financial resources to complete a transaction, such as the purchase of goods.
Then it lost two Australian directors, Geoff Ross and Christian Drysdale, “without warning” and their company secretary in the space of two days.
The company said 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.
They’d resigned because “authorisation from the company management for the new bank confirmation was not forthcoming”.
The money trail stopped
The final nail came at the end of September.
The auditors said they couldn’t approve the half year accounts because they couldn’t get independent confirmation from Traditional Therapies’ bank in China to establish precisely how much money the company actually had.
A detail that, the company revealed, they’d known about since the end of August.
Traditional Therapies stock lost 88 per cent of its value since listing in 2015, going into administration with the stock sitting at 5.8c.
Pitchers Partners has been contacted for comment.