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By David Stringer
Oct. 10 — A mining executive who fled Australia three years ago has been extradited from Hong Kong and charged with 104 insider trading offenses linked to planned takeovers by a Sichuan Hanlong Group unit.
Xiao Hui, also known as Steven Xiao, a former managing director of the unit, is accused of persuading his wife and other parties to acquire shares and securities in Bannerman Resources Ltd. and Sundance Resources Ltd. while he had information on takeover bids for the companies, according to Australia's corporate regulator.
No plea was entered to the charges and Xiao made no application for bail at a hearing at Sydney's Central Local Court, the Australian Securities & Investments Commission said Oct. 10 in an e-mailed statement. Xiao arrived in Australia at about 7 a.m. local time accompanied by Australian Federal Police officers following his extradition from Hong Kong.
The case is one of the most serious in ASIC's history, Anthea Li, a lawyer from Hong Kong's Department of Justice, told a hearing there in March. Xiao's charges come after Liu Han, the founder of Sichuan Hanlong, was sentenced to death in May by a Chinese court for Mafia-like crimes.
Xiao was arrested in Hong Kong in January at the request of the Australian government. He had been allowed to leave the country for China in November 2011, after ASIC had opened an investigation into the suspected insider trading, on the promise he would return in the same month.
Sichuan Hanlong, based in Chengdu, China, made an offer to buy Sundance, developing an iron ore project in Africa, in 2011. Perth-based Sundance terminated the A$1.1 billion ($1 billion) deal last year on concern Hanlong was unable to secure funding. Hanlong also discussed a conditional takeover with Bannerman in 2011, according to filings.
Liu Han, chairman of Sichuan Hanlong when the Sundance offer was made, was sentenced to death in May on charges including murder and leading an organized crime group in China, according to the Xianning Intermediate People's Court. He was suspected of involvement in Mafia-like activities for more than a decade, which led to the deaths of eight people, the court said in a statement on its official Weibo account.
More than 30 other people have been sentenced for crimes associated with Liu Han, who was one of the top 500 richest people in China with a fortune of $650 million, according to a wealth ranking published last year by the Shanghai-based Hurun Report.
Calvin Zhu, Xiao's former colleague at Hanlong, was sentenced last year to 27 months in jail after pleading guilty to three counts of insider trading.
In March, a court disclosed Xiao had requested asylum in Hong Kong. Robert Tibbo, a lawyer for Xiao, argued threats had been made in Australia against the former executive and his family. Xiao was remanded in custody to appear at a hearing on Nov. 26, ASIC said in its statement. The charges each carry a maximum penalty of 10 years in jail, the regulator said.
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©2014 Bloomberg L.P. All rights reserved. Used with permission.
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