Australia's corporate regulator has started legal action in the federal court against German construction group Hochtief for insider trading.
The Australian Securities and Investments Commission on Tuesday said was seeking a declaration of contravention and a financial penalty order against Hochtief for alleged insider trading.
ASIC’s decision centres on the early 2014 on-market acquisition of ordinary shares of Leighton Holdings (LEI), now known as CIMIC Group, by Hochtief’s local unit, Hochtief Australia.
The alleged contravention occurred on January 29, 2014, when Hochtief changed earlier instructions to purchase shares in Leighton on its behalf between January 6 and 31, 2014. The variation extend the last day on which shares could be purchased beyond January 31, 2014.
ASIC alleges that Hochtief contravened the insider trading provisions of the Corporations Act by procuring Hochtief Australia to extend the closing date for acquiring Leighton “when it was in possession of insider information, being that Leighton Holdings Limited’s 2013 financial results were likely to be at the high end of previous earnings guidance”.
In a separate statement, Hochtief said it will submit to the court that its contravention was inadvertent.
“By its contravening conduct, Hochtief did not seek or obtain trading profit,” the statement on Tuesday said.
Hochtief said it has been actively co-operating with ASIC in its investigations into this matter since August 2014.
The proceedings will be heard in the Federal Court of Australia in Sydney at a yet to be determined date.