Information known to fallen timber company Gunns’ board would have “seriously disturbed” investors, a court hearing has heard. Sources: The Weekly Times, The Australian
The court case involved the insider trading of the company’s former chairman John Gay.
The author of a report for the Australian Securities and Investment Commission said a management report from October 2009 painted a different picture of the company to the information made public.
Wayne Lonegan, a corporate valuer, has told the Launceston Magistrates Court a comparison of figures from the 2008/09 and 2009/10 financial years would have affected the share price.
“The company had been historically profitable,” Lonegan said. “What they’re now looking at … is a very significant deterioration.
“That’s a very serious situation.”
Lonegan said stockbrokers were forecasting a modest downturn in profits, while Gunns management was expecting a decline of more than 100%.
Gay pleaded not guilty to two charges of insider trading in which it is alleged he sold 3.4 million shares, worth around $3 million, with knowledge about Gunns’ performance that was not generally available.
Gunns reported 98% deterioration in half yearly earnings in February 2010 and its share price plummeted.
Gay’s trial is scheduled for the Tasmanian Supreme Court in August.
