New Hanlong Suspects http://www.smh.com.au/business/new-hanlong-mining-suspects-20111221-1p5k2.html
TWO more executives of Hanlong Mining have been caught up in the corporate regulator's investigation into alleged insider trading in Australian mining companies Bannerman and Sundance resources.
And in another development, the regulator has also alleged that Hanlong's former vice president, Calvin Zhu, used $1 million of Hanlong company funds to trade in derivatives of the Australian miners - with the profits and more than $925,000 of Hanlong money going into offshore accounts held by himself and other individuals.
Details of the Australian Securities and Investment Commission investigation emerged during an urgent hearing before duty judge Justice Michael Slattery in the New South Wales Supreme Court yesterday afternoon, as ASIC sought to stop Mr Zhu from flying to China this weekend to visit family.
Advertisement: Story continues below In his affidavit tendered in court, Mr Zhu questioned why ASIC had not sought travel restrictions against two other executives it ''suspects'' have been involved in insider trading of Bannerman and Sundance shares.
Mr Zhu said a letter from ASIC to his solicitors identified those executives as ''Mr Nelson Feng Chen, a director of Hanlong (Australia) Resources Pty Ltd and Hanlong Mining Investment Pty Ltd; and Mr Simon Yang, the CFO of Hanlong Mining Investment Ltd''.
''To the best of my knowledge and belief [ASIC] has not to date taken any steps to restrain Mr Chen or Mr Yang from leaving Australia. [ASIC] has given no explanation as to why it considers they are not a flight risk, whereas I am.''
Counsel for ASIC, David Stack, alleged Mr Zhu was at risk of absconding. He said while Mr Zhu had claimed he was nominee-trading for Hanlong, the disbursement of money created a problem for that explanation. He said $1 million was transferred from Hanlong Metals to a company controlled by Mr Zhu, Wingatta, which made more than $1 million profit in trading Sundance CFDs, allegedly through Mr Zhu's inside knowledge of Hanlong's planned takeover of Sundance.
''Company monies were used to fund the CFD [trades], but the company's funds, and the profits, were then dispersed to everyone other than the company. The company received $76,000,'' Mr Stack said.
Mr Zhu is entitled, under a restricted travel regimen put in place by the court, to travel overseas. One of the conditions is that his wife, Nancy Wang, surrender her passport and remain in the country. Mr Zhu said in his affidavit that his wife was not under investigation by ASIC.
ASIC's bid to prevent Mr Zhu leaving the country comes on the heels of the failure of Hanlong's former managing director, Steven Hui Xiao, to return last month from what should have been a brief visit to China.
There are asset preservation and travel restriction orders against the original five identified by ASIC - Mr Xiao and his wife Xike Hu, Mr Zhu, Hanlong's trading manager, Fan Zhang, and a family friend of Mr Zhu, Fan Fan Chen.
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