The general manager of an ASX listed pharmaceuticals group has been charged with insider trading following allegations from the corporate regulator that he disposed of shares weeks before the loss of a major client was made public.
In a statement, ASIC said Michael Story, general manager at wholesale and distribution pharmaceutical business Sigma Healthcare, had been charged with two counts of insider trading.
The regulator said Sigma had been the main supplier to Chemist Warehouse Group in 2018, but announced on 2 July of that year that the wholesale supply agreement between the two companies would cease on 30 June 2019.
Following the announcement, Sigma shares closed 40 per cent lower compared to the previous day, and Mr Story had disposed of 645,047 Sigma shares on 9 May 2018 and a further 250,000 Sigma shares on 21 June 2018, ASIC said.
The regulator's case alleges that Mr Story was in possession of inside information relating to the status of negotiations to renew the wholesale supply agreement between Sigma and CWG at the time he disposed of the two tranches of shares.
Each of the charges carried a maximum sentence of 10 years' imprisonment at the time of the offences, but the maximum has since been increased to 15 years for each charge.
The matter has been adjourned to a committal mention hearing in the Melbourne Magistrates Court on 18 December.