Gunns' former chairman Gay in court

Written By Unknown on Senin, 24 Juni 2013 | 11.51

INFORMATION known to fallen timber company Gunns' board would have "seriously disturbed" investors, a court hearing in the insider trading case of former chairman John Gay has heard.

The author of a report for the Australian Securities and Investment Commission says a management report from October 2009 painted a different picture of the company to the information made public.

Wayne Lonegan, a corporate valuer, has told the Launceston Magistrates Court a comparison of figures from the 2008/09 and 2009/10 financial years would have affected the share price.

"The company had been historically profitable," Mr Lonegan said.

"What they're now looking at ... is a very significant deterioration.

"That's a very serious situation."

Mr Lonegan said stockbrokers were forecasting a modest downturn in profits, while Gunns management was expecting a decline of more than 100 per cent.

Gay has pleaded not guilty to two charges of insider trading in which it is alleged he sold 3.4 million shares, worth around $3 million, with knowledge about Gunns' performance that was not generally available.

Gunns reported a 98 per cent deterioration in half yearly earnings in February 2010 and its share price plummeted.

The preliminary proceedings hearing continues on Monday afternoon.

Gay's trial is scheduled for the Tasmanian Supreme Court in August.


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