On receiving news that Federal Environment Minister Malcolm Turnbull had approved Gunns’ new pulp mill, the share market reacted positively, boosting Gunns share price on the day by 17%. Today the shares are trading at around $3.44, up from $2.94 the day before the announcement.

Yet it seems that a week before Mr Turnbull announced his approval, some investors were prepared to take a punt on the final decision.

According to an anonymous Crikey tipster, “Gunns Ltd was given confidential assessment information at 2pm on 27 September. No public announcements or additional relevant media coverage was made to the public or the market until 30 September. But, for some reason, between 3pm on September 27 and 11am on September 29, 18 million shares in Gunns Ltd changed hands – seven times their usual volume of trade.”

The claims on the volume of share trades appear to be supported by this chart from etrade:

It’s also public knowledge that Gunns was briefed on the contents of the report prior to its public release. That’s despite a promise made by Mr Turnbull on 30 August that the report would be released simultaneously to Gunns and the public. He told the ABC:

When the Chief Scientist gives us his report, we’ll obviously consider it very carefully, we will publish it. The process I’m undertaking is completely transparent, and completely accountable. So we’ll publish it, and Gunns and everybody else will have an opportunity to comment on it, and then I would hope to be in a position to make a decision.

Yet on 1 October, the ABC revealed that Mr Turnbull’s office had shown Gunns the entire report prior to its public release, potentially giving the company an advantage over other investors.

It raises a series of questions about the spike in share trading on 27 and 28 September.

When precisely did Mr Turnbull’s office share the report with Gunns? If the share trades coincide with that disclosure, who made them? And what role, if any, did sharing the report with Gunns have in any subsequent share trading decisions made by the company or people associated with it?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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