Gay free to run family companies

FORMER Gunns boss John Gay has won the right to manage two family companies, but remains disqualified from managing any others, the Supreme Court of Tasmania heard yesterday.

Mr Gay pleaded guilty to one count of insider trading last year and was fined $50,000 and disqualified from managing any companies for five years by Justice David Porter.

The 70-year-old applied to the court earlier this year to sit as a director on a family trust, JEG Management, and family company Specialty Veneers, claiming they would go bust without him.

Justice Robert Pearce released his judgment in Hobart yesterday and found that Mr Gay would be allowed to manage the companies, but could not direct them by himself.

Mr Gay sold 3.4 million Gunns shares in 2009 while privy to a management report that had not been released to the market.

Gunns shares plummeted 20 per cent in value when the information he held was publicly released two months later.

During Mr Gay's court proceedings Commonwealth prosecutors, acting for the Australian Security and Investments Commission, said Mr Gay had benefited by nearly $800,000.

Justice Pearce acknowledge the seriousness of the crime.

"Mr Gay's offence was a serious offence,"Justice Pearce said.

"He has suffered public condemnation and loss of reputation".

But Justice Pearce said there was no "appreciable" risk that Mr Gay would reoffend and while his management of the companies would "pose no risk to the public" he would still be disqualified from managing any other companies.

In handing down his judgment Justice Pearce said Mr Gay was a "driving force" behind the Launceston and Somerset-based companies.

"Without the benefit of his experience, knowledge and expertise there is a prospect that their interests may be adversely affected," Justice Pearce said.

ASIC chairman Greg Medcraft told a Senate estimates hearing earlier this year that ASIC "hadn't given up" on launching proceeds of crime action against Mr Gay for insider trading, and it was later confirmed that the Commonwealth Director of Public Prosecutions had begun action and was waiting on further advice.

Former Gunns boss John Gay has won the right to manage two family companies.

Former Gunns boss John Gay has won the right to manage two family companies.