ASIC’s secret check on Nine Entertainment over share trading

ASIC opened a file into whether a Nine Entertainment insider was involved in possible inappropriate share trading last year.

ASIC wrote to Nine about the shares traded between January and July 10 last year. Picture: NCA NewsWire/Joel Carrett

The nation’s corporate regulator opened a file into whether a Nine Entertainment insider was involved in possible inappropriate share trading just weeks before the company’s financial results were disclosed to the market last year.

The Australian Securities and Investments Commission initially wrote to Nine on August 4, requesting information about the matter, with correspondence between the company and the regulator continuing until August 21. Both Nine and ASIC declined to respond to questions, but sources with knowledge of the deliberations said it was no longer an ongoing line of inquiry.

The Australian has confirmed that ASIC had written to Nine about the shares traded between January and July 10 last year. The regulator declined to release documents relating to their queries because it would “cause significant stress and personal reputational damage” and because a third party had “objected to the release of the documents”.

In response to a request for documents under freedom of information laws, ASIC said the release “will disclose the internal confidential deliberations of (Nine) … which is likely to have an unreasonably disruptive impact on the business”.

The information would also cause professional harm to the Nine insider and it was “likely that their future business prospects would diminish due to the reputational damage caused by any disclosure”.

Nine chief executive Hugh Marks detailed the company’s financial results on August 27, six days after the final correspondence with ASIC about the share trading.

The inquiries came during a difficult period for Nine, with the company’s chief financial officer Paul Koppelman resigning on July 10 with immediate effect for personal reasons. Mr Marks abruptly quit as chief executive several months later — on November 14 — after disclosing he had been in a secret relationship with another executive, Alexi Baker, who left one month earlier.

Mr Koppelman, who has not responded to repeated requests for comment, was last month appointed chief financial officer for advertising giant Dentsu’s Australian and New Zealand arm.

The Australian is not suggesting any wrongdoing by Mr Koppelman or Mr Marks.

Mr Marks’ departure split the Nine board between those who had been part of the broadcaster before it merged with Fairfax Media in December 2019, and directors previously with the publisher of the Sydney Morning Herald and The Age.

Nick Falloon, a former Fairfax Media chairman who is now Nine’s deputy chairman, is under internal investigation over anonymous allegations that he allowed his son to use a corporate membership — owned by Nine-controlled Domain — at the Terrey Hills Golf and Country Club.

Mr Falloon has denied there are any issues arising from his use of any membership. The Australian is not suggesting Mr Falloon has misused any company funds or engaged in any wrongdoing.

ASIC declined to comment on the share trading query sent to Nine, and in a response to a separate request for information under freedom of information laws said it could not confirm or deny the existence of documents which specifically referred to individuals.

“Confirmation or denial of the existence of documents in ASIC’s possession concerning the individual’s involvement in potential ­inappropriate trading of shares would disclose whether or not that individual is associated with those matters,” ASIC lawyer Fleur Forsyth wrote.