Former Hanlong mining executive pleads guilty to serial insider trading
Tuesday 31 July 2012
Mr Bo Shi Zhu, also known as Calvin Zhu, of Cammeray, NSW, the former Vice President, Investments of Hanlong Mining Investment Pty Ltd (Hanlong Mining) today pleaded guilty in the Downing Centre Local Court to three insider trading charges relating to conduct from December 2006 to July 2011.
The charges, brought by ASIC, relate to conduct engaged in by Mr Zhu while working for three different employers: Caliburn Partnership Pty Limited (Caliburn); Credit Suisse Management (Australia) Pty Ltd (Credit Suisse); and Hanlong Mining.
While working for each employer Mr Zhu acquired inside information relating to proposed takeovers and procured one or more persons to acquire financial products relating to the proposed target companies.
The first charge relates to conduct of Mr Zhu while employed as an Executive at Caliburn. Mr Zhu has admitted that between 8 December 2006 and 30 March 2007, while in possession of inside information relating to a proposed takeover of Veda Advantage Limited (Veda) by Pacific Equity Partners, he procured two friends, Ms Fanfan Chen (Ms Chen) and Mr Fei Yu, to acquire Veda securities and contracts for difference (CFDs).
The second charge relates to conduct of Mr Zhu while employed as an Associate at Credit Suisse. Mr Zhu has admitted that: on 14 August 2008, while in possession of inside information relating to a proposed takeover of Funtastic Limited (Funtastic) by Archer Capital Pty Ltd, he procured Ms Chen to dispose of Funtastic CFDs; and on 13 February 2009, while in possession of inside information relating to a proposed takeover of Adelaide Managed Funds Asset Backed Yield Trust (AYT) by Bendigo and Adelaide Bank Limited, he procured Ms Chen to acquire units in AYT.
The third charge relates to conduct of Mr Zhu while employed as a Vice President of Hanlong Mining. Mr Zhu has admitted that: between 6 and 8 July 2011, while in possession of inside information relating to a proposed takeover by Hanlong Mining of Bannerman Resources Limited (Bannerman), he procured Ms Chen, his mother-in-law Jing Juan Zhao and Wingatta Pty Ltd (Wingatta) to acquire Bannerman CFDs and securities; and between 13 and 15 July 2011, while in possession of inside information relating to a proposed takeover by Hanlong Mining of Sundance Resources Limited (Sundance), he procured Ms Chen and Wingatta to acquire Sundance CFDs.
The gross profits derived from Mr Zhu’s offending was over $1.3 million, with Mr Zhu’s share of the profits approximately $370,000.
Mr Zhu was charged on 12 July 2012, less than one year after ASIC’s Market Surveillance team identified the suspicious trading (on 18 July 2011) and ASIC commenced its investigation (on 21 July 2011).
The matter has been committed for sentencing in the Supreme Court and listed for arraignment on 7 September 2012. Bail was granted on a number of conditions including Mr Zhu surrendering his passport to ASIC.
ASIC’s investigation is part of Project Wickenby.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.
ASIC’s investigation is ongoing in relation to other persons associated with Hanlong Mining. ASIC does not propose to comment further at this stage as its investigation is ongoing and the matter is now before the Court.
Background
Project Wickenby is a cooperative partnership between the Australian Taxation Office, Australian Federal Police, Australian Crime Commission, ASIC and the Commonwealth Director of Public Prosecutions, with support from the Australian Transaction Reports and Analysis Centre, the Australian Government Solicitor and the Attorney-General's Department.
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