Former executive chairman of Healthzone sentenced to 4 years and 3 months imprisonment for fraud

The Australian Securities and Investments Commission (ASIC) announced that former Healthzone Limited director, Peter David Roach, was sentenced on Friday 24 November in the Sydney District Court to 4 years and 3 months imprisonment for fraud and related offences. The sentencing comes after Mr Roach was found guilty on 12 October 2017 of conspiracy to dishonestly obtain a $1 million director's loan, as well as two counts of providing false and misleading information to the ASX and six counts of falsifying company documents. Mr Roach must serve a minimum of 2 years and 3 months of his sentence in prison before becoming eligible for parole.

The jury hearing the case found that Mr Roach conspired with Ge Wu, a fellow director of Healthzone, to defraud the Commonwealth Bank of Australia (CBA) and Healthzone by obtaining a $1 million loan. The $1 million was loaned to Healthzone by CBA for on-lending to Mr Roach to buy shares in Healthzone. Instead, Mr Roach used $900,000 of those funds to settle a family-related property issue and did not purchase any shares with the money from the loan. Instead, he used the balance to pay personal and business related expenses.

The court heard that both he and Mr Wu knew that the true purpose of the loan was to settle this family-related property issue and not to purchase shares in Healthzone as represented to the CBA and the board of directors.

Following CBA providing the loan, Mr Roach authorised two ASX announcements to be made which falsely stated that he had purchased shares in Healthzone. No such purchase took place. In addition, Mr Roach falsified company documents, including altering legal advice provided by Healthzone's lawyers.

"This was serious misconduct by the former Chairman of a publicly listed company, calculated to defraud a bank of a very large sum of money and mislead shareholders and investors," ASIC Commissioner Cathie Armour said.

"The sentence imposed by the Court sends a clear message to the corporate world that the consequences of such misconduct are serious. ASIC reminds those who are thinking of engaging in illegal conduct that the likelihood of being detected by ASIC is increasing," Ms Armour said.


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