Former Hanlong Mining managing director Hui Xiao has been sentenced to a total of 8 years and 3 months imprisonment on insider trading charges.
Mr Xiao had previously pleaded guilty to two ‘rolled up’ charges of insider trading, and formally admitted a third 'rolled up' charge, involving a total of 102 illegal trades in financial products related to Sundance Resources Limited and Bannerman Resources Limited in July 2011, while he was the managing director of Hanlong Mining Investment Pty Ltd (Hanlong Mining) (refer: 15-239MR).
Mr Xiao was sentenced to imprisonment for a total term of 8 years and 3 months, with a non-parole period of 5 years and 6 months.
Mr Xiao has been in custody since his arrest in Hong Kong in January 2014 and his extradition from Hong Kong to Australia in October 2014. Taking into consideration time already served, Mr Xiao will not qualify for release until after 11 July 2019.
ASIC Commissioner Cathie Armour said: 'This sentence demonstrates the seriousness of insider trading. Maintaining confidence in the integrity of our financial markets is vital.'
The Commonwealth Director of Public Prosecutions prosecuted the matter.
On 17 November 2011, the Supreme Court of NSW made a variation to court orders obtained by ASIC that permitted Mr Xiao to travel to China and return back to Australia on 26 November 2011. Following his departure from Australia on 21 November 2011, Mr Xiao failed to return to Australia in accordance with that court order.
Following Mr Xiao’s failure to return to Australia, charges were laid against Mr Xiao in relation to his alleged insider trading, and the Australian Government presented a request for Mr Xiao’s arrest to Hong Kong in November 2013. On 12 January 2014, Mr Xiao was arrested in Hong Kong and, on 17 September 2014, following extradition proceedings, Hong Kong issued an order for the surrender of Mr Xiao to Australia.
Mr Xiao was escorted by officers from the Australian Federal Police (AFP).
ASIC worked with the Commonwealth Attorney-General’s Department, the Commonwealth Director of Public Prosecutions, the AFP, the Hong Kong Department of Justice and the Hong Kong Police in securing Mr Xiao’s surrender to Australia.
On 15 February 2013, Bo Shi Zhu, the former Hanlong Mining vice-president, was convicted and sentenced to two-years-and-three months jail, to serve a minimum term of 15 months, as part of ASIC’s investigation (refer: 13-027MR).
Following an ASIC referrals to the CDPP and the AFP’s Criminal Assets Confiscation Taskforce, $586,000 has been restrained and $792,000 has been forfeited under the Proceeds of Crime Act 2002 from persons and entities associated with ASIC’s investigation.
Editor's note: 1
On 5 February 2018 the NSW Court of Criminal Appeal handed down its judgement in Mr Xiao's appeal against his sentence. Mr Xiao was re-sentenced to imprisonment for a total term of 7 years, with a single non-parole period of 4 years and 6 months which will expire on 11 July 2018.