Former Queensland Gas Company Secretary Mukesh Panchal has been sentenced to two years imprisonment for insider trading.

Mr Panchal pleaded guilty to four contraventions of the insider trading provisions of the Corporations Act in the District Court of Brisbane on 4 February 2009. The Australian Securities and Investments Commission began investigating the former chief financial officer and company secretary after it was alleged that he purchased 13 parcels of shares totalling 418,148 Queensland Gas shares valued at over $1.3 million between 15 January and 1 February 2008.

Mr Panchal purchased the parcels of shares with the inside knowledge of a looming $870 million joint venture with British based firm BG Group Plc to develop liquefied gas exports of Asia.  Mr Panchal requested that the ASX issue a trading halt on Queensland Gas shares, and two days later, when the deal was announced to the market on 4 February 2008, the share price soared.  It was found that Mr Panchal purchased the parcels at the time when he possessed inside information that he knew would have a material effect on the price or value of the Queensland Gas shares.

Brisbane District Court Judge Warren Howell described Mr Panchal’s actions as “calculated criminal conduct” but did take into account Mr Panchal’s early guilty plea, exemplary work history, and cooperation with the investigation despite the length of the sentence handed down.

Mr Panchal can be released after 14 months on a good behaviour bond.

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