A former Sichuan Hanlong Group unit executive was sentenced to 27 months in jail after pleading guilty to three counts of insider trading, Australia’s stock exchange regulator said in a statement today.
The Australian Securities & Investments Commission also said on its website that it’s investigating other people associated with Hanlong Mining Investment Pty and won’t make any further comments on that probe.
Calvin Zhu, former vice president at Hanlong Mining, admitted to trading on insider information between Dec. 8, 2006 and March 30, 2007 when Pacific Equity Partners Pty planned a takeover of Veda Advantage Ltd., while he was an executive at Caliburn Partnership Pty, according to the regulator. Zhu used inside information in trades worth A$1.3 million ($1.35 million), with his own share of the transactions amounting to about A$370,000, ASIC said.
The second count related to insider trading on a proposed takeover of Funtastic Ltd. (FUNAU:US) by Archer Capital Pty in 2008 and another transaction in 2009, while Zhu was an associate at Credit Suisse Management (Australia) Ltd. The third was while he was employed at Hanlong Mining and traded in relation to proposed takeovers by the company of Bannerman Resources Ltd. and Sundance Resources Ltd. in 2011.
The Bannerman and Sundance insider trading charge carried a maximum penalty of a A$495,000 fine, or three times the profit made, and/or 10 years in jail. The earlier offenses each carry a maximum fine of A$220,000 and/or five years in jail. Zhu wasn’t fined.
Sichuan Hanlong agreed in October 2011 to buy Sundance in a deal that valued the owner of the Mbalam iron project in Africa at A$1.65 billion. The transaction hasn’t closed yet.
The Australian regulator investigated Zhu and other individuals on allegations they took A$1 million from Hanlong Mining, created a company where the money was deposited, and traded shares and contracts of Bannerman and Sundance before Sichuan Hanlong offered to buy them.
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