Uniti says Vaughan Bowen to continue as exec director while insider trading case plays out

Former Vocus chair Vaughan Bowen will continue to oversee mergers and acquisitions at Uniti Group after being charged with insider trading.

Vaughan Bowen is an executive director at Uniti Group.

Former Vocus chairman Vaughan Bowen will continue in his role as an executive director at telco Uniti Group while his insider trading case makes its way through the courts.

On Tuesday the Australian Securities and Investments Commission revealed that Mr Bowen had been charged with two counts of insider trading relating to his disposal of shares in Vocus Group.

Uniti shares fell almost 5 per cent on Tuesday before being placed in a trading halt. On Wednesday morning the shares were 1.9 per cent lower at $3.83.

ASIC said 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.

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’’.

Uniti told the ASX late on Tuesday that it “notes media reports” regarding the allegations.

“The company understands that Mr Bowen emphatically denies the allegations and will be vigorously defending the matter,’’ Uniti said in a statement to the ASX.

“The company also notes that this matter does not relate to trading in UWL shares.

“The operations of Uniti Group will not be impacted. The company’s business, and executive team, will continue as normal under the leadership of MD & CEO Michael Simmons.

“The UWL board does not intend to make any changes to Mr Bowen’s role and position of executive director (M&A) of the company, which will continue, until the outcome of this matter has been determined.’’

READ MORE:How Uniti went from minnow to major player

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.”

Uniti itself has grown rapidly on back of more than 10 acquisitions, including OptiComm for about $700m and Telstra Velocity for $140m, both in 2020.

It is now valued at more than $2.6bn with the shares appreciating from 25c at listing in February 2019 to as high as $4.39.

Uniti’s net profit was up 83 per cent to $29.19m for the past financial year.

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.

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.