China Environment Group Limited (CEG), a company incorporated in the British Virgin Islands, and its sole director, Mr John William Ullmann, have consented to Federal Court orders preventing them from selling shares and providing financial services in Australia.

ASIC’s investigation found that Mr Ullmann, a UK citizen living in Hong Kong, acquired 100 million shares in CEG for one US cent each. These shares were then marketed to Australians at US$1 by companies based offshore: Lucky Pearl Investments Limited (Lucky Pearl), Anova Corporate Services Limited (Anova) and Great Wall Capital Limited (Great Wall).

Promotional materials prepared by Mr Ullmann and distributed by Anova and Great Wall deceived Australian investors into believing that money raised would be used by CEG to fund its investment in Chinese clean technology projects. In fact the money paid by Australian investors was paid to Lucky Pearl and Mr Ullmann.

Between May and November 2012, over US$1.4 million was paid by about 49 Australian investors for Mr Ullmann’s CEG shares of which Lucky Pearl received over US$1.1 million as commission. Mr Ullmann received the balance.

Many of those who purchased CEG shares from Mr Ullmann had previously acquired shares marketed by Anova and Great Wall in other companies including Hydro Solutions Asia and Delmedica Investments Limited.

ASIC lists CEG, Anova, Great Wall, Hydro Solutions Asia and Delmedica Investments Limited as unlicensed companies Australians should not deal with on its MoneySmart website.

The Federal Court orders prohibit CEG and Mr Ullmann from:

• offering securities (including shares) to any person in Australia

• soliciting investment or receiving funds from members of the public intended for investment in CEG, and

• carrying on a financial services business in Australia, including providing advice, or arranging for any person to acquire a financial product.

Deputy Chairman Peter Kell said this matter once again highlights the importance of investor education.

'As much as we would like to, ASIC can't stop every scam before it happens, especially those based outside of Australia. What we can do is educate investors and make them aware of steps they can take to minimise the likelihood of being caught out by scammers'.

We would encourage investors to visit our MoneySmart website where there is a list of companies that are unlicensed, and with whom Australians should avoid dealing', Mr Kell said.

ASIC is aware that since it commenced its action in the Federal Court, some people who bought CEG shares have been contacted by offshore unlicensed entities with offers to purchase the CEG shares providing the investors pay more money for shares in another company. ASIC understands that this has been the method of operation of Great Wall and Anova representatives for some time. As with all cold calling scams, ASIC recommends that investors do not accept these offers as, in the vast majority of cases, the total investment will be lost. Before entering into any transaction to buy or sell shares, investors should check ASIC's registers to ensure the person or company they are dealing with is licensed or authorised to do so.

Further information about the risks of dealing with overseas cold callers and acquiring shares in companies they promote can be found on ASIC’s MoneySmart website.

If you are cold called and offered shares you can report the matter.

View a list of companies that ASIC warns are not licensed in Australia to sell financial products and with whom Australians should not deal with.