Ex-Gunns chief John Gay to face proceeds of crime case

Comment: Why ASIC lets the big fish go

Corporate regulator ASIC says it still wants to pursue a proceeds of crime case against convicted Gunns ex-chairman John Gay, despite an Australian Federal Police decision to drop it.

ASIC is turning to the Commonwealth Director of Public Prosecutions for help with the high-profile case, a Senate estimates committee was told.

“We are very focussed on pursuing it,” ASIC chairman Greg Medcraft told the committee on Wednesday.Mr Gay was fined $50,000 in 2013 after pleading guilty to insider trading over the sale in late 2009 of $3.09 million worth of the timber company’s shares, before they fell by 19 cents a share.

Mr Gay was described by trial judge David Porter at sentencing as “being of exemplary character”, but the amount of the fine drew claims of leniency.ASIC did not appeal.

It referred the case to the AFP which said last month it would not  pursue a proceeds of crime action.

AFP assistant commissioner Michael Phelan told estimates on Tuesday one of the obstacles to a prosecution was the need to satisfy a judge about the amount of a fraud, some years later.Under questioning from Greens Senator for Tasmania Peter Whish-Wilson, ASIC’s senior executive leader for markets enforcement, Chris Savundra, said in this case the AFP was not the only agency that could pursue a conviction for proceeds of crime.

“Proceeds of crime remains a live issue,” Mr Savundra said. “We are in a dialogue with the DPP in relation to proceeds.”However Mr Medcraft told Senator Whish-Wilson it had to be determined whether there were any funds to be gained.

“Just a warning on this,” Mr Medcraft said.

“You’ve always got to be aware that people can organise their affairs in such a way that assets cannot be reached.”

Senator Whish-Wilson said outside the hearing that the case was a significant matter of public interest.

“Penalties for white collar crime need to be further strengthened and I hope that the recommendations from the Senate Inquiry into ASIC will reflect the community desire for this change”, he said.

Gunns collapsed in 2012 and is being sold off in administration, with expressions of interest in major assets due to close on 31 March.

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