Fraudulent FD given 18 month jail term

Powerhouse chairman Malcolm Richard Stone was also imprisoned for four-and-a-half years for diverting company assets to finance a failed share issue for the energy company listed in New York and London.

In late 1994 Stone struck a joint deal with the Chinese government to finance and build three power stations, and selected Powerhouse Resources – then known as Com-Tek – to push through with the deal.

Bogus underwriters were invented by the two directors after an unsuccessful ‘offer and placing’, which were front companies with no assets and were not in a position to meet their underwriting liabilities.

Stone used the company’s funds to purchase its own shares and for his other business interests.

FD Mottram assisted in diverting the company’s assets, and backed up Stone’s misleading and false statements to the other Powerhouse directors concerning the use of the company’s funds.

The case was brought by the Serious Fraud Office.

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