Coroner & Legal
Former Gunns boss John Gay pleads guilty to insider trading
The former head of collapsed Tasmanian timber giant Gunns, John Gay, has pleaded guilty to insider trading.
Gay was due to stand trial today, but changed his plea.
The 70-year-old pleaded guilty in the Supreme Court in Launceston to one charge of insider trading after selling 3.4 million Gunns shares in December 2009.
Gay’s defence team told the court his guilty plea was on the basis that he was in possession of information he ought to have known would affect the share price, not that he did know the information would affect the share price.
The charges relate to the existence of an unreleased management report from October 2009.
Sentencing submissions will be heard next week.
John Gay has been a controversial figure on the business and political landscape.
He spearheaded the massive expansion of Gunns over several years until he retired in 2010.
In 1989, he steered Gunns through scandal when its then chairman Edmund Rouse tried to bribe a Labor politician to cross the floor of Parliament, sparking a Royal Commission.
Under Gay’s direction, Gunns exploded onto world markets in 2000 with takeovers which made the business one of the biggest hardwood sawmillers in the Southern Hemisphere.
In 2003, he launched his most ambitious plan, a pulp mill in Tasmania’s Tamar Valley.
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Gunns collapsed last year owing banks more than $500 million.
• Senator Peter Whish-Wilson and Greens’ candidate for Bass, Lucy Landon-Lane: “Today should be the last chapter of this sad and sorry pulp mill saga – it’s time for Tasmania to now move on and invest our energies in a new future,” said Senator Peter Whish-Wilson. “The pulp mill permits should be ripped up – the community needs the anxiety and conflict buried for good. “It is questionable if the business case for this project ever stacked up. “If Gunn’s had borrowed an additional $2B prior to its collapse, imagine how many more investors, farmers and businesses may have been left out of pocket,” Senator Whish-Wilson concluded. “Tasmania has dodged a bullet with the pulp mill not proceeding,” said Greens’ candidate for Bass, Lucy Landon-Lane. “The Pulp Mill Assessment Act needs to be repealed so the community can move forward and invest in sustainable industries that will create jobs for the Tamar Valley,” Ms. Landon-Lane concluded.