The Australian Competition and Securities Commission has proven its commitment to taking a strong stance against insider trading by investigating and charging the former company secretary of one of Queensland's five largest publicly listed companies with insider trading.

Former Chief Financial Officer and Company Secretary of energy giant Queensland Gas Limited (Queensland Gas), Mr Mukesh Panchal, pleaded guilty on 4 February 2009 in the District Court of Brisbane, to four contraventions of sections 1311(1) and 1043A(1) of the Corporations Act.

ASIC began its investigations after it was alleged that Mr Panchal purchased 13 parcels of shares totaling 418,148 Queensland Gas shares valued at over $1.3 million between 15 January and 1 February 2008. This was in addition to the already substantial portfolio that he received as an incentive for his employment with Queensland Gas.

This matter will return to the District Court of Brisbane for sentencing on 15 April 2009. ASIC Commissioner Belinda Gibson said that "this outcome will prove a strong deterrent against insider trading and reflects ASIC's focus last year on market integrity offences".

The case of Mukesh Panchal should serve as a harsh reminder to all corporations, their directors and company secretaries as to the importance of understanding the prohibitions on insider trading. The insider trading prohibition is designed to ensure that the market is conducted in a fair and equal manner, to prevent profiteering by those with price sensitive information not available to the general public, and to ensure that shareholders are not disadvantaged by share price manipulation based on insider knowledge.

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