Former Vocus chairman Bowen charged with two counts of insider trading
Vaughan Bowen, the former Vocus chairman, has been charged with two counts of insider trading relating to the sale of his shares in the telco.
Former Vocus Group chairman Vaughan Bowen has been charged with two counts of insider trading relating to the disposal of shares in the fibre and network solutions provider.
Mr Bowen — who is currently an executive director of Uniti Group with a shareholding in that telco worth more than $44m — appeared via his legal representative in the Melbourne Magistrates’ Court on Tuesday.
Later on Tuesday Uniti shares were placed in a trading halt after falling 4.9 per cent to $3.90, with the company saying it expected to make an announcement regarding the matter before the start of trade on Wednesday.
The two charges relate to Mr Bowen’s sale of 5.6 million shares in Vocus on June 4, 2019, with each charge carrying a maximum penalty of 15 years’ imprisonment, according to the Australian Securities and Investments Commission.
ASIC has alleged that “at that time, Mr Bowen was in possession of inside information concerning the likely withdrawal of a proposal by EQT Infrastructure IV Fund to acquire all shares in Vocus, prior to this information being announced to the market’’.
Mr Bowen founded M2 Group in 1999, with the company listing on the ASX in 2004.
In Uniti’s latest annual report, it says Mr Bowen “took M2 from start-up to a corporation valued at greater than $2bn, with more than 3000 team members, nearly one million customer services across Australia and New Zealand and owner of household names including Dodo, iPrimus and Commander.’’.
“During the M2 journey, Vaughan led the identification, negotiation and acquisition of more than 30 companies.”
M2 merged with Vocus in 2016 with its share price going from 25c in its initial public offer to $10.55 when the merger took place.
Mr Bowen was an executive director of Vocus in 2016-17 and chairman in 2017-18.
The FY18 annual report indicates he held 8.87 million Vocus shares during that period. His shareholding in subsequent years is not reported as he ceased to be a director on March 5, 2018.
Vocus courted two separate takeover proposals in 2019, with Swedish private equity firm EQT lobbing a $5.25 a share, $3.3bn bid for the company in May of that year.
The Australian reported at the time that EQT wanted to revise its offer down to about $5 a share just days into the process.
Vocus told the ASX on June 4 2019 that “following an accelerated period of due diligence, EQT has decided not to proceed with the transaction outlined in the indicative proposal”.
“Accordingly, discussions with EQT in relation to the indicative proposal have now ceased.’’
A week later AGL tabled a $3.02bn bid, at $4.85 per share, which was withdrawn within less than a week.
At the time, then AGL chief Brett Redman said “we are no longer confident that an acquisition of Vocus at the proposed terms would represent sufficient certainty of creating value for AGL shareholders”.
Vocus shares dropped nearly 25 per cent on the day of the AGL announcement to $3.29.
Vocus was eventually bought in June by Macquarie Infrastructure and Real Assets and Aware Super for $3.5bn, or $5.50 a share.
Mr Bowen joined Uniti in March 2019, shortly after it listed, buying almost $1 million worth of stock at the time.
His shareholdings in Uniti currently stand at 10.69 million shares and 4.99m million options. With Uniti’s shares currently trading at $4.13, his directly-held shares are worth more than $44.1m.
Uniti listed at just 25c per share in February 2019.
The insider trading matter is listed to return for a hearing in the Melbourne Magistrate’s Court on December 7, 2021.
It is being prosecuted by the Commonwealth Director of Public Prosecutions.
The Australian has been unable to contact Mr Bowen.
A Vocus spokesperson said “No current director or employee of Vocus is associated with these allegations, which relate solely to the conduct of Mr Bowen following his resignation from the Vocus Board in March 2018’’.
“Vocus has had no association with Mr Bowen since his resignation from the board.’’
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