The former head of the collapsed Tasmanian timber company Gunns, John Gay, is facing a maximum penalty of 10 years in prison, after admitting to insider trading.
Gay was due to stand trial today, but changed his plea.
The 70-year-old pleaded guilty in the Supreme Court in Launceston to one charge of insider trading after selling 3.4 million Gunns shares in December 2009.
He has admitted to selling the shares while in possession of information he ought to have known would affect the share price.
The information was in an October 2009 management report, which was not available to the market.
A pre-trial hearing was told the report showed Gunns had lost its entire profit margin and when the company’s half yearly results were released, the share price dived by 20 cents.
Gay made $3.1 million from the sale.
The court was previously told Gay sold the 3.4 million shares after a conversation with his doctor about reducing his debt levels because he had a terminal illness.
Sentencing submissions will be heard next week.
The charge carries a maximum penalty of 10 years in prison, or a fine.
John Gay has been a controversial figure on the business and political landscape.
He spearheaded the massive expansion of Gunns over several years until he retired in 2010.
In 1989, he steered Gunns through scandal when its then chairman Edmund Rouse tried to bribe a Labor politician to cross the floor of Parliament, sparking a Royal Commission.
Under Gay’s direction, Gunns exploded onto world markets in 2000 with takeovers which made the business one of the biggest hardwood sawmillers in the Southern Hemisphere.
In 2003, he launched his most ambitious plan, a pulp mill in Tasmania’s Tamar Valley.
The proposal sparked a bitter campaign which divided the Tasmanian community.
Gay bowed to investor pressure in 2010, stepping aside as managing director. He retired from Gunns soon after.
Gunns collapsed last year owing banks more than $500 million.
Sourced from ABC News
So let’s watch as the legal system will essentially let this matter go unpunished because of the status of the accused. I’ve got a black & white view on how justice should be served for this and I’m sure that it’s going to differ from what the outcome will be!
If a prison sentence isn’t applied here then my support/belief in the legal system will essentially take a dive (further than it already has!)
So only time will tell… :/
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