10/02/2021 - 09:41

Director avoids jail over market manipulation scheme

10/02/2021 - 09:41

Bookmark

Save articles for future reference.

Perth-based corporate finance director Ananda Kathiravelu has narrowly avoided jail after being convicted of market manipulation for his role in a 2016 capital raising scheme.

Director avoids jail over market manipulation scheme
Perth-based corporate finance director Ananda Kathiravelu was sentenced to 12 months imprisonment, but was released on a $10,000 recognisance to be of good behaviour.

Perth-based corporate finance director Ananda Kathiravelu has narrowly avoided jail after being convicted of market manipulation for his role in a 2016 capital raising scheme.

Mr Kathiravelu was sentenced to 12 months imprisonment in the Supreme Court yesterday, but was released on a $10,000 recognisance to be of good behaviour for seven months.

Mr Kathiravelu was a director of iron ore exploration company Radar Iron Limited and corporate finance firm Armada Capital in January 2016 when Radar announced plans to acquire 100 per cent ownership of tech company Weebit.

Radar entered an agreement with Armada in May 2016 to lead capital raising, an agreement that stipulated that if the company managed to raise at least $5 million, Radar would pay Armada a placement fee of five per cent of the funds raised.

From May 12 until May 17, the court was told Mr Kathiravelu and an Israeli businessman exchanged a series of messages via WhatsApp about artificially increasing the price of Radar’s shares to 5.2 cents ahead of a scheduled trading halt.

The court was told that more than 212,000 Radar shares were acquired at $0.05 and 87,469 Radar shares at $0.051 in the 24 hours before the suspension of Radar shares from the ASX.

The scheme was the subject of an extensive 12-month investigation by the Australian Securities and Investments Commission, which uncovered the text messages, but the government body was unable to prosecute Mr Kathiravelu’s alleged overseas co-conspirator.

While acknowledging the seriousness of Mr Kathiravelu’s offending, Supreme Court judge Anthony Derrick said he also took into account his guilty plea, remorse and prior good character, as well as the fact that his conviction meant he would be automatically disqualified from managing corporations until February, 2026.

It is anticipated that Mr Kathiravelu will also be expected to cover the costs and expenses of that investigation, costs in the order of $190,000.

In a statement released this morning, ASIC commissioner Cathie Armour said market manipulation eroded public confidence in the fair, orderly and transparent operation of the market and warned that the government body would take action against misconduct that undermined the fairness and integrity of financial markets.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options