The asylum request from Xiao Hui, also known as Steven Xiao, was disclosed at an extradition hearing in Hong Kong’s magistrates' court today. Xiao is seeking asylum from both mainland China and Australia, his lawyer Robert Tibbo said.
“A lot of matters my client can’t discuss in open court,” or before Australian government lawyers, Tibbo said. The asylum claim was made last month and could take years to be resolved, he said. Magistrate Bina Chainrai denied Xiao’s request for bail and set another hearing for March 24.
Xiao faces prosecution for 104 offenses related to insider trading if he is forced to return to Australia. The Australian Securities & Investments Commission suspects him of illegally dealing shares of Bannerman Resources Ltd. (BMN) and Sundance Resources Ltd. (SDL) in 2011 before Hanlong made takeover bids for the companies.
The case is one of the most serious in the history of the Australian regulator, Anthea Li, a lawyer from Hong Kong’s Department of Justice, told the court today. There’s a “high probability” Xiao will return to mainland China, which doesn’t have an extradition treaty with Australia, if he’s granted bail, she said.
ASIC declined to comment today.
Xiao was arrested in Hong Kong in January at the request of the Australian government. He had been allowed to leave Australia for China in November 2011, after ASIC started an investigation into the suspected insider trading, on the promise he would return in the same month.
It was “impossible” for him to return to Australia as there were threats against him and his family, Tibbo said today. Hong Kong was Xiao’s choice as a “safe haven,” said the lawyer, who last year advised Edward Snowden.
Calvin Zhu, Xiao’s former colleague at Hanlong, was sentenced to 27 months in jail after pleading guilty to three counts of insider trading last year. One of those counts related to his trades of Bannerman and Sundance shares while he was employed at Hanlong. The other two were from trades he made while employed at Caliburn Partnership Pty and Credit Suisse Management (Australia) Ltd.
Zhu, Xiao, and two other Hanlong employees agreed in 2010 to set up a private fund for their investments, Zhu said in an affidavit filed in an Australian court. Xiao, who controlled the daily operation and every aspect of the Hanlong unit, suggested they buy stock in Sundance and criticized Zhu for buying too little, according to the sworn statement.
“Steven Xiao often ridiculed me at social gatherings about the fact that he thought I was naive about the prevalence of insider trading,” Zhu said.
Liu Han, the founder of Sichuan Hanlong Group, was charged in China with organizing Mafia-like groups, the country’s official news agency Xinhua said last month. Liu had led the $1.2 billion takeover bid for Australian iron ore miner Sundance, which collapsed last year after his reported detention by police in China.
The case is ESMP2327/2013 in Hong Kong’s Eastern Magistrates’ Court. The Australian case is Australian Securities and Investments Commission v Steven Hui Xiao. 2011/00285688. Supreme Court of New South Wales (Sydney).
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