Finance director convicted for market manipulation
Corporate finance director Ananda Kathiravelu has been convicted in the Supreme Court of Western Australia for conspiring to manipulate the market by attempting to inflate the value of the share price of Radar Iron Limited.
Kathiravelu was convicted of “conspiring with another to take part in, or carry out, whether directly or indirectly, transactions that had, or were likely to have, the effect of creating or maintaining an artificial price” for Radar Iron Limited shares traded on the Australian Securities Exchange (ASX) between 12 May, 2016, and 17 May, 2016.
He had been sentenced to 12 months imprisonment and could be released “forthwith on recognizance in the sum of $10,000 to be of good behaviour for seven months”.
The transactions occurred one day prior to the suspension of Radar shares from official quotation of the ASX, during which a capital raising by Radar took place.
Kathiravelu was a director of Radar and of the corporate finance firm, Armada Capital, which was the lead manager of the capital raising.
Armada Capital stood to gain a 5% fee of the funds raised in the capital raising if it successfully raised over $5 million.
The court found Kathiravelu’s offending was serious and that he had attempted to increase the attractiveness of the capital raising by artificially increasing the price of Radar shares immediately prior to the suspension.
The conviction meant Kathiravelu was automatically disqualified from managing corporations until 8 February, 2026.
He had previously pled guilty last August, after charges were brought due to an investigation by the Australian Securities and Investments Commission (ASIC).
Cathie Armour, ASIC Commissioner, said market manipulation eroded public confidence in the fair, orderly and transparent operation of the market.
“ASIC will take action against misconduct which undermines the fairness and integrity of our financial markets,” Armour said.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
