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Hanlong Mining chief executive Steven Hui Xiao has had assets frozen and been ordered by the NSW Supreme Court not to leave the country amid allegations of insider trading.
Aside from a trip to Hong Kong today and tomorrow to “attend to visa requirements” Xiao will be prevented from leaving Australia until later this month.
Xiao’s wife has agreed to surrender her passport to Australian authorities as security for the Hong Kong trip.
The Australian Securities and Investments Commission has also restricted travel and frozen assets of Xiao’s fellow Hanlong staff Calvin Zhu and Fan Zhang.
ASIC said it was investigating “suspected insider trading activities in relation to Bannerman Resources and Sundance Resources.”
Hanlong has a 19 per cent stake in African iron ore hopeful Sundance, bought in part from the estate of deceased Macarthur Coal founder Ken Talbot.
It currently has a bid underway for African uranium explorer Bannerman.
Bannerman shares rose 71 per cent to 39 cents on the eve of Hanlong’s 27 June bid for the company.
Sundance shares climbed 31 per cent ahead of Hanlong’s bid on July 18.
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.”
A spokesperson for Hanlong declined to comment over the proceedings.
The investigation of Hanlong has the potential to reignite business tensions between Australia and China.
In March last year China jailed Rio Tinto executive and Australian national Stern Hu and three Chinese colleagues for bribery and stealing commercial secrets.