Chinese mining boss Steven Xiao has received the longest sentence for insider trading in Australian history after being sentenced to eight years and three months’ jail.

A Chinese financier extradited to Australia in 2014 on insider-trading charges has been sentenced to more than eight years in prison, the country’s securities regulator said.

The former managing director of Chinese-based miner Hanlong Australia will serve a minimum of 5½ years for 102 illegal trades in Australian mining companies that netted him $1.7 million.

Xiao’s sentencing in the NSW Supreme Court yesterday concluded a four-year investigation by corporate watchdog the Australian Securities & Investments Commission that began with fake takeover bids for miners Sundance and Bannerman by Hanlong.

Taking into account time served, Xiao will not qualify for ­release until after July 11, 2019. Last year, Hanlong’s founder and former­ group chief Liu Han was sentenced to death in Hubei province for what Chinese authorities alleged was corruption and leading a mafia-style crime ring for three decades while building his business.

The leadership group at Hanlong set up a trading syndicate that pooled millions of dollars in funds and then made company decisions to better their trading positions.

With Xiao as Hanlong Australia boss, the company made takeover bids for the Australian-listed Sundance Resources and Bannerman Group, allegedly making huge profits by buying shares before­ the bids and selling shortly after.

ASIC alleged the abandoned Bannerman bid was made solely to drive up the group’s share price and enrich the syndicate.

Xiao, investment director Calvin Zhu, chief financial officer Simon Yang and fellow Hanlong director Nelson Chen were all alleged­ members of the syndicate. Xiao took a loan worth $US1m to fund the syndicate, which Justic­e Hall found was a “serious aggravating factor”.

Source:

http://www.theaustralian.com.au/business/mining-energy/steven-xiao-gets-record-jail-time-for-insider-trading/news-story/58d521d9b5c54f52ddb2807fbccb1f8c

http://www.wsj.com/articles/former-hanlong-exec-jailed-for-8-years-in-australia-on-insider-trading-1457682107

 

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