The Uniti Group Ltd (ASX: UWL) share price could be on the move today following the company's response to alleged insider trading by one of its former executive directors.
The telecommunications company's shares crashed to as low as $3.42 yesterday on the news, before rebounding quickly. When Uniti requested a trading halt in late afternoon trade, its shares froze at $3.905, down 4.99%.
What did Uniti say?
In last night's statement, Uniti advised it was aware of media reports about the allegations made in regards to executive director, Vaughan Bowen.
The Australian Securities and Investments Commission (ASIC) alleges that Mr Bowen personally sold Vocus Group Ltd (ASX: VOC) shares receiving inside information on a failed takeover.
The transactions, worth $25.7 million occurred in June 2019, a day before Vocus shares plummeted on the market release. Swedish private equity firm, EQT Infrastructure IV Fund withdrew from a $2.3 billion offer to acquire 100% of Vocus' shares.
Under section 1043A of the Corporations Act, each charge of insider trading carries a maximum penalty of 15 years' imprisonment.
Mr Bowen is being charged with two counts of insider trading.
Uniti stated that Mr Bowen denies the allegations and will be vigorously defending the matter in court.
Furthermore, the company advised its operations have not been impacted and will continue as normal.
The board does not intend to make any changes to Mr Bowen's role and position of executive director for now. It will not be making any decisions until the outcome of the matter has been determined.
Uniti share price snapshot
Despite yesterday's fall, it has been a strong 12 months for Uniti shares, climbing by more than 175%. In 2021 alone, its share price is up almost by 130%, reflecting positive investor sentiment in the company.
Based on today's price, Uniti presides a market capitalisation of roughly $2.6 billion and has approximately 687 million shares on issue.
