The former head of Hanlong Mining Investment, Hui Xiao, has been sentenced to eight years and three months in jail for his role in Australia’s biggest insider trading case.
New South Wales Supreme Court Justice Peter Hall ruled on Friday that Xiao was guilty of “a gross breach of trust and confidentiality”.
Xiao, a Chinese citizen who also goes by the names Steven Xiao and Jiayi Xiao, pleaded guilty to conducting 102 illegal trades related to two Perth-based resources companies while he was managing director of the Australian arm of Hanlong Mining.
The Australian Securities and Investments Commission alleged that Xiao made a profit of A$1.7m through insider trading linked to Sundance Resources and Bannerman Resources. The watchdog said Xiao persuaded his wife and others to buy shares in the companies in which he had insider knowledge that they were the subject of proposed takeovers.
Both companies were the subject of proposed takeover offers by the Chinese company Hanlong Mining, which subsequently did not go ahead.
The sentencing brings to an end a five-year saga that in 2011 saw Xiao flee to China and later Hong Kong, where he unsuccessfully argued that he should be granted refugee status due to Australia’s harsh treatment of asylum seekers.
Xiao’s sentencing follows the execution of Liu Han, the former chairman of Hanlong Group — parent of Hanlong Mining — in China last year following his conviction on corruption charges.
ASIC welcomed Xiao’s sentence, which it believes is the longest handed down by an Australian court for insider trading.
“My message to anyone considering insider trading is ASIC will find you,” said Cathie Armour, ASIC commissioner. “We will find insider traders and we will prosecute you.”