The former company secretary of Queensland Gas Company, Mukesh Panchal, has been sentenced to two years in prison for insider trading but will be released on a good behaviour bond after 14 months.
Panchal pleaded guilty to four insider trading charges that emerged from the results of an Australian Securities and Investments Commission investigation.
He bought more than 400,000 shares in Queensland Gas, which were valued at over $1.3 million, between 15 January and 1 February 2008. ASIC said in a statement that these shares were bought as a result of insider information.
An ASIC statement says that Panchal “bought the shares while in possession of inside information about an $870 million alliance with British-based BG Group plc”.
“This information, had it been generally available, would have had a material effect on the price or value of Queensland Gas shares.”
Panchal, a 42-year-old New Zealand citizen, said that his behaviour was due to bullying and harassment from QGC managing director Richard Cottee, and said that he was “stressed by the way (Cottee) was treating me”.
The sentence was handed down by Judge Howell of the Brisbane District Court, who said that insider trading remains a serious criminal offence but took into account Panchal’s guilty plea and co-operation with authorities.
He also said that Panchal’s purchases of shares were “not isolated incidents” and described the behaviour as “calculated criminal conduct”.
Howell also commented that Panchal had suffered serious consequences for his actions, including the loss of his job and damages to future work prospects.
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Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
