Australian regulators should probe trading in steelmakers' shares in the week before the announcement of a carbon-tax plan that gives A$300 million ($375 million) in concessions to the industry, say two lawmakers who sat on the committee that helped design the policy.
The biggest jump by OneSteel shares in two
years and a 6.2 per cent surge by BlueScope Steel on July 6 should be investigated by the Australian Securities & Investments Commission, said lawmakers Rob Oakeshott and Christine Milne.
The price movements may point to leaks in the days before Prime Minister Julia Gillard announced the plan on July 10, they said.
"There appears to be some evidence that there were people who had information from which there was a commercial benefit," said Milne, deputy leader of the Greens party, which holds the balance of power in Australia's upper house.
"I support calls for an ASIC investigation. I was surprised and frustrated about the amount of information that was leaked from the package in the final week. It was an avalanche."
The Government was so concerned about the sensitivity of the package that Oakeshott, Milne and other members of the advisory committee had to sign secrecy agreements. The report was released in a media lock-up in Parliament House in Canberra on Sunday, July 10. Still, details leaked, Oakeshott said.
"In the week before the announcement, other parties became involved, and it was in that final week it became increasingly clear leaks were occurring," said Oakeshott, an independent MP who supports Gillard's minority Labor Party government.
"In terms of an investigation, I would fully support that to determine who knew what and why.
"Every member of the advisory committee was fully aware of the market sensitivity of the information," he said.
"Hundreds of people knew about the details of this policy in the final week and it was impossible the government could keep a lid on it."
OneSteel and BlueScope shares rose more than 6 per cent on July 6, adding about A$310 million to their combined market value. Details of the plan, including the starting price of A$23 a tonne for carbon, appeared in newspapers through the week before the official release.
The first details of help for the steel industry appeared in the Australian Financial Review on July 8.
"It's crucial to ensure a level playing field," said Jason Teh at Investors Mutual in Sydney. "Any abnormal price action should be investigated."
Oakeshott and other advisory committee members were warned about the confidentiality of the carbon plan in a letter from Cabinet Secretary Mark Dreyfus.
"Details of the carbon-price plan were market-sensitive," Dreyfus said. "I felt it appropriate to reinforce the sensitivity and confidentiality of the information before the committee."
The committee members were Oakeshott, Milne, independent lawmaker Tony Windsor, Greens party leader Bob Brown, Climate Change Minister Greg Combet, Treasurer Wayne Swan and Prime Minister Gillard.
Under Australia's carbon reduction plan, the Government will provide AS$9.2 billion in the form of free carbon permits over three years to assist the biggest-polluting businesses such as aluminum smelters, steelmakers and manufacturers.
BlueScope said on July 10 it would receive about 60 per cent of the A$300 million in steel-industry assistance. The rest would go to OneSteel.
Spokesman Matthew Abbott said ASIC was not able to comment on specific price movements.
- Bloomberg
Australian regulators should probe trading in steelmakers' shares in the week before the announcement of a carbon-tax plan that gives A$300 million ($375 million) in concessions to the industry, say two lawmakers who sat on the committee that helped design the policy.
The biggest jump by OneSteel shares in two
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