Insider trading charges laid over PanAust takeover
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The corporate watchdog has charged a Queensland man with 88 insider trading related offences connected to a 2015 takeover bid for gold and copper miner PanAust.
Mr Jin Xi Li of Caloundra appeared in the Maroochydore Magistrates Court yesterday charged with the offences.
The charges relate to the trading of shares and CFD derivatives of PanAust (ASX:PNA) prior to an announcement of a $1.1 billion takeover bid for the company by State-owned Chinese group Guangdong Rising Assets Management on in March 2015. The deal was priced at $1.71 per PanAust share.
A CFD, or Contract for Difference, is an agreement between an investor and CFD issuer which allows a trader to speculate on future price movements in a financial product, such as shares.
The value of a CFD roughly corresponds to the value of the underlying financial product, in this case, shares of PanAust traded on the ASX.
The regultor alleges Mr Li had inside information regarding the takeover bid when he purchased PanAust CFDs on 32 occasions between March 19 and 26, 2015 and got others to purchase CFDs on 55 occasions between March 23 and 27, 2015.
It is also alleged he communicated inside information to another person around March 20, 2015.
Mr Li was released on bail. The matter was adjourned to December 15 before the Brisbane Magistrates Court.
Each of the charges carries a maximum penalty of 10 years imprisonment.
The regulator’s investigation into trading in PanAust followed the identification of suspicious trading by the Market’s Surveillance Team.
The $1.1 billion takeover bid was rejected by PanAust which deemed it “inadequate”.
However, Guangdong came back with a higher $1.2 billion offer a month or so later which PanAust agreed to.
The deal saw several copper and gold deposits in Asia move into Chinese hands. Including two operating mines in Laos and the giant Frieda River mine in Papua New Guinea.