Vaughan Bowen, ex-Vocus chair, denies using inside information to trade for $25m, trial hears

Former Vocus chair Vaughan Bowen is fighting charges he made millions by trading with inside information received from a lawyer while having lunch at a popular Melbourne CBD restaurant.

Vaughan Bowen, former chairman of Vocus Group. Picture: Stuart McEvoy

The former chief of a publicly listed telco allegedly used inside information to make about $25m from the sale of shares in his company, as he defends allegations he obtained the information from the firm’s general counsel over lunch at a popular Melbourne CBD restaurant.

Ex-Vocus chairman Vaughan Bowen is accused of two charges of insider trading, when he allegedly conducted the trades after learning about the withdrawal of a bid from EQT Infrastructure to acquire the fund in June 2019.

Mr Bowen denies making the trades using inside information.

During closing submissions of his criminal trial at Melbourne County Court it emerged that central to the Commonwealth Director of Public Prosecution’s (CDPP) case is the claim ex-Vocus general counsel Ashe-lee Jegathesan found out the deal had fallen through while she was at lunch with Mr Bowen at Lucy Liu on June 4, 2019. Shortly after Ms Jegathesan ended a meeting about the deal, Mr Bowen allegedly made the trades.

Lucy Liu at 23 Oliver Lane, Melbourne. Picture: Eugene Hyland

For the CDPP, barrister Ben Ihle KC told the court Mr Bowen that afternoon instructed his broker to sell his Vocus shares at a discount of $4.55 and $4.56, when earlier that day they were trading at $4.82 and $4.71.

According to Mr Bowen’s indictment, he is accused of selling more than three million shares in his name and more than two million shares in his and his wife’s name. Mr Bowen made about $25m from the sale of the shares and Mr Ihle said Mr Bowen sold “more shares than he ever sold”, the court heard.

One day later, Vocus’s share price slumped to $3.37 after the market was informed about the withdrawal of the bid.

Ms Jegathesan was told the EQT bid was not likely to go ahead during a zoom meeting with the company’s executives she attended on June 4 at 1.30pm during her lunch with Mr Bowen, Mr Ihle said.

Music would have been playing in the background at Lucy Liu, and if Ms Jegathesan took the zoom call at the restaurant, “we can’t exclude the possibility that she got up and joined that call away from the table”, Mr Ihle said.

“The evidence suggests it was not so loud that a business call could not be taken in the restaurant,” he said.

Mr Isle sighted expert evidence given to the jury showing Ms Jegathesan’s phone connected to a number of different cell towers moving from where Vocus’s office is to the northeast where Lucy Liu is.

But, Mr Bowen’s defence team rejected the allegation Ms Jegathesan shared any sensitive information with Mr Bowen, telling the court she also denied reporting anything to Mr Bowen about the offer, in response to an Australian Securities and Investments Commission investigation years earlier.

Ms Jegathesan was not a witness at the trial, which has been ongoing for about four weeks.

For Mr Bowen, Neil Clelland KC told the jury there was a lack of admissible evidence in the CDPP case “on the critical aspects of proof … There is a theory, no doubt about that although, at times it got a little bit blurry.”

Later, Mr Clelland said: “The litany of failures in that (ASIC) investigation is not due to a lack of powers.”

Ms Jegathesan was “cautious and conservative” in her advice to the ASX-listed Vocus, which included advice about disclosure obligations and whether information was price sensitive, Mr Clelland said.

“She was in charge of making sure the law was followed by the directors of that company in relation to its continuous disclosure obligations,” he said.

“She is somebody who has never been charged with anything arising out of 4 June.”

Mr Clelland also said ASIC failed to collect CCTV footage at the restaurant, and did not interview the waiter who served Mr Bowen and Ms Jegathesan although they knew his name.

ASIC originally brought the case against Mr Bowen, but he was discharged following a contested committal hearing at Melbourne Magistrates Court in 2022. Subsequently, the CDPP directly indicted Mr Bowen. Mr Clelland will continue to deliver closing submissions on Thursday.