The former managing director of China’s Hanlong Mining has been extradited to Australia for what could be the nation’s biggest insider trading case.
Hui Xiao, also known as Steven Xiao and Jiayi Xiao, is accused of illegally profiting from driving up the share prices of Australian mining companies Bannerman Resources and Sundance Resources through takeover bids.
Xiao appeared at Sydney’s Central Local Court on Friday charged with 104 counts of insider trading after arriving on a flight from Hong Kong accompanied by federal police.
Xiao’s court appearance comes almost three years after he allegedly defied a NSW Supreme Court order to return to Australia from China.
The Australian Securities and Investments Commission (ASIC) alleges Xiao used inside information while managing director of Hanlong to trade in financial products related to uranium miner Bannerman and iron ore miner Sundance which hopes to build a large mine in west Africa.
In July 2011 Hanlong made an unsuccessful $144 million takeover bid for Perth-based Bannerman Resources.
Last year Hanlong terminated a $1.3 billion takeover of Sundance Resources which is also based in Perth.
ASIC alleges Xiao acquired shares and financial products in Bannerman and Sundance through his wife and companies in the Virgin Islands and Australia prior to Hanlong making takeover offers.
It is understood to be the largest case of alleged insider trading fraud in Australian history.
Each offence carries a maximum penalty of ten years jail.
Mr Xiao was not required to enter a plea but his lawyer indicated the charges “might be resolved” by the time his client is next due to front court, on November 26.
Xiao was refused bail.
ASIC had been trying to extradite Xiao from Hong Kong to Australia since 2011.
Xiao was arrested in Hong Kong in January this year, two months after the Australian government requested his extradition.
Hong Kong issued an order for the surrender of Xiao to Australia three weeks ago.