Former mining boss jailed for insider trading

A former boss of Hanlong Mining has been sentenced to eight years in jail on insider trading charges.

The case has been ongoing since 2011, when Hanlong chief executive Steven Hui Xaio fled Australia after the Australian Securities and Investment Commission (ASIC) froze his and other Hanlong executives assets as it carried out investigations of “suspected insider trading activities in relation to Bannerman Resources and Sundance Resources”.

Hanlong held 19 per cent stake in African iron ore hopeful Sundance, bought in part from the estate of deceased Macarthur Coal founder Ken Talbot.

It also had a bid for African uranium explorer Bannerman.

Bannerman shares rose 71 per cent to 39 cents on the eve of Hanlong’s 27 June, 2011, bid for the company.

Sundance shares then climbed 31 per cent ahead of Hanlong’s bid on 18 July.

Xiao is believed to have used his position to carry out trading to the value of $2.3 million, generating himself $1.7 million in profits.

At the time, ASIC said in a statement the NSW Supreme Court had found the commission had a “solid basis for investigating whether Mr Xiao may have contravened the Corporations Act insider trading provisions”.

The NSW Supreme Court then ordered Xiao not to leave the country, and ordered both him and his wife to surrender their passports.

However, it did allow him to fly to Hong Kong to “attend to visa requirements”.

He then fled to mainland China and was only extradited to face prosecution in 2014.

Xiao has now been sentenced to jail on three charges, one of which involved more than 100 illegal trades relating to planned investments in Sundance and Bannerman.

Xiao is not the only Hanlong executive to face prosecution.

Calvin Zhu, an executive of the miner, was sentenced to two years and three months jail in 2013 after admitted he made profits for himself and associates of more than $1.3 million, through the use of information relating to takeover bids.

The company’s CEO, Lui Han, was executed by the Chinese government last year on charges of "organising and leading a mafia-style group", as well as murder and other crimes.

Regarding Xaio’s sentencing, ASIC commissioner Cathie Armour declared it a win for the security of Australian markets.

"Maintaining confidence in the integrity of our financial markets is vital for everyone…. my message to anyone considering insider trading is this: 'ASIC will find you,'" Armour said.

"We will find insider traders and we will prosecute them."

 

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