Hall of Shame
Phoslock Environmental Technologies Ltd (PET AU)
Phoslock Environmental Technologies Ltd, (PET) formerly Phoslock Water Solutions Limited, is an Australia-based company that provides water technologies and engineering solutions. The Company provides its solutions to manage nutrients and other water pollutants. Its products include Phoslock, Zeolite and Bacteria. Phoslock is its lanthanum modified bentonite material that binds phosphate and removes excess phosphate from the water. It also provides engineering and construction solutions for water remediation. Its product is used in water bodies such as lakes, dams and canals. It operates a production facility in Changxing, 150 kilometer (km) from Shanghai.
PET started trading on the Australian Stock Exchange (ASX) in August 2002 and raised A$2M in its IPO. Additional share offerings between 2006 and 2020 raised a total of A$30.89M; (Dec.2006: A$2.94M, Feb.2013: A$0.13M, Jun.2016: A$2.73M, Sep.2017: A$7.55M, Jul.2018: A$5.54M, Apr.2020: A$12.00M).
September 17, 2020 Trading in the company shares were halted pending the release of an announcement regarding the outcome of an ongoing independent investigation into accounting irregularities concerning PET’s China operations.
September 30, 2020 Deputy Chairman, Zhigang Zhang and non-executive director Mr Ningping Ma resigned with immediate effect.
October 8, 2020 KPMG released its preliminary findings, into the suspected accounting irregularities, relating to the Company's China operations. KPMG found fraudulent activity, including false accounting and falsification of invoices and service contracts, where the Company or its subsidiaries were the recipient, and potential improper tax reporting and misappropriation of funds. Several China-based employees had been either stood down or terminated as a result. KPMG also confirmed that several previously undisclosed related party transactions had taken place.
ASX: Phoslock - Market Update – China accounting Irregularities, 8 Oct 2020
Australian Financial Review: Phoslock admits to accounting fraud, 8 Oct 2020
The Market Herald: Phoslock Environmental Technologies uncovers fraud at office in China, 8 Oct 2020
Phoslock Environmental Technologies: Annual Report YE- Dec 2019
Phoslock Environmental Technologies: Annual Report YE- Dec 2018