Charges laid over insider trading at Kidman’s Wesfarmers sale
A man with close links to former Kidman Resources chief executive Martin Donohue has been charged with insider trading, with the corporate regulator alleging he had early knowledge of Wesfarmers’ $776 million plan to buy the lithium company in 2019.
Duncan Stewart appeared in the Melbourne Magistrates Court on Thursday charged with buying Kidman shares in April 2019 while aware that Wesfarmers had made a proposal to buy the company. The Australian Securities and Investments Commission alleges he encouraged a family member to buy Kidman shares “while in possession of confidential information about the Wesfarmers proposal and a second, earlier takeover offer that had been considered by the company”.
Martin Donohue led lithium aspirant Kidman Resources to a $776 million takeover by Wesfarmers.
Mr Stewart is the son of former Bank of Melbourne chairman Chris Stewart, a respected figure in Australia’s banking industry who died in 2009.
One member of Mr Stewart’s family previously worked at Kidman and has had dealings with Mr Donohue, including buying a holding vehicle from him. The Australian Financial Review has decided not to name the family member because they have not been charged, and there is no suggestion they were involved.
ASIC has also not charged Mr Donohue, and has not alleged that the information came from him.
Attempts to contact Mr Donohue via mobile phone and via the new mineral exploration company he chairs – Pacific State Metals – were unsuccessful.
When the Wesfarmers proposal was announced to the market in May 2019, Kidman shares jumped from $1.29 to $1.84. The regulator has alleged this resulted in Mr Stewart realising profits of $68,114. Before being delisted, Kidman shares had been volatile.
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