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02/452 Simon Hannes sentenced: two and a half years jail

Friday 13 December 2002

Mr David Knott, Chairman of the Australian Securities and Investments Commission (ASIC), today noted that Mr Simon Gautier Hannes has been sentenced to two and a half years jail.

Mr Hannes will serve four months and nine days, in consideration of previous time served. Mr Hannes is due for release from prison on 21 April 2003.

Mr Hannes’ sentence follows his conviction on one charge of insider trading in the securities of TNT Limited (TNT) and two charges under the Financial Transactions Reports Act.

In sentencing Mr Hannes, the Judge took into account that he has previously served 15 months and 22 days in jail under earlier convictions that was quashed. However, His Honour concluded that the seriousness of the offences required an additional period in custody.

‘Mr Hannes’ sentence is the culmination of a long process, including an intensive and complex investigation, a conviction in 1999 that led to Mr Hannes being jailed, the quashing of that conviction, a retrial and Mr Hannes’ subsequent conviction in September this year’, Mr Knott said.

‘From ASIC’s perspective, it was important that Mr Hannes stand convicted of these offences. He was a person in a position of trust who cynically embarked on a calculated plan to profit from insider trading.

‘For that reason ASIC welcomed both the decision of the Commonwealth Director of Public Prosecutions (CDPP) to retry Mr Hannes and the resulting convictions delivered on 11 September, 2002.

‘The Court’s decision to impose a further custodial sentence sends an important warning to others who may be tempted to convert confidential inside information to personal profit.

‘I extend ASIC’s congratulations to the Commonwealth Director of Public Prosecutions and his officers for their successful prosecution of these offences’, Mr Knott said.

Mr Hannes was convicted after a 15-week retrial in the Supreme Court at Darlinghurst. The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

He was originally convicted on the same charges in the Sydney District Court in August 1999 and was jailed for two years and two months and fined $110,000.

However, the convictions were quashed following a decision by the New South Wales Court of Criminal Appeal in December 2000, and he was released after serving 15 and a half months of the sentence.

Mr Hannes was convicted on an insider trading charge that related to him (using the name ‘Mark Booth’) acquiring 5,000 TNT $2 call options in September 1996 through Ord Minnett Limited, when he had knowledge that TNT was likely to be the subject of a takeover bid.

The ASIC investigation of ‘Mark Booth’s’ trading started within 24 hours of the announcement of a takeover by Dutch company Royal PTT Nederland NV (KPN) at $2.45 on 2 October 1996.

Within two days, ASIC obtained court orders freezing the $2 million profit from ‘Mark Booth’s’ trading, and this profit was ultimately returned to the people who had sold the call options.

ASIC’s investigation into the circumstances surrounding ‘Mark Booth’s’ purchase of call options was conducted in collaboration with the Australian Federal Police and the Australian Stock Exchange.

Using sophisticated investigation techniques, ASIC was able to identify Mr Hannes as the person who had bought the TNT $2 call options.

During the trial, the Crown led forensic evidence from a handwriting expert and forensic computer expert.

The Financial Transactions Reports Act charges relate to Mr Hannes making six cash withdrawals in one day from different bank branches and then using the cash to acquire nine bank cheques, again from various banks and branches, with a view to avoiding the reporting requirements under the Act.

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