InvestSMART
The Intelligent Investor Growth Fund is listing on the ASX. Initial Offer closes Friday.

Gillard allies seek inquiry into steel share price rise

AUSTRALIA'S corporate regulator has been urged to investigate a series of sharemarket fluctuations that appeared to anticipate elements of the Gillard government's carbon tax plan.

AUSTRALIA'S corporate regulator has been urged to investigate a series of sharemarket fluctuations that appeared to anticipate elements of the Gillard government's carbon tax plan.

Two crucial allies of the minority Labor government, independent MP Rob Oakeshott and Greens senator Christine Milne, yesterday called on the Australian Securities and Investments Commission to investigate why two steel stocks rose sharply in the days before a $300 million support package was announced for the steel sector.

The two companies, OneSteel and BlueScope, had long been expected to suffer under a carbon tax, yet their shares rose significantly on July 6 four days before the formal announcement and ahead of media leaks about the support package. Steel was not the only sector to experience large share-price fluctuations in the lead-up to the July 10 release of the tax policy.

Some renewable-energy stocks soared by more than 20 per cent the day before plans for a new renewable-energy support agency were published.

Senator Milne, who helped develop the tax plan as part of the multiparty climate-change committee, said an investigation was warranted.

"I support calls for an ASIC investigation," she said. "I was surprised and frustrated about the amount of information that was leaked from the package in the final week. It was an avalanche.

"There appears to be some evidence that there were people who had information from which there was a commercial benefit."

Mr Oakeshott, whose support is needed by Prime Minister Julia Gillard to retain a majority in the House of Representatives, said the number of people with knowledge of the plan had swelled into the hundreds in the days before July 10, and it became "impossible" for the government to "keep a lid on it".

"In terms of an investigation, I would fully support that to determine who knew what and why," he said.

ASIC would neither confirm nor deny last night whether it had launched an investigation.

Senior members of the Gillard government declined to give their backing to such an investigation.

Climate Change Minister Greg Combet who was entrusted by Ms Gillard's office with responding on behalf of the entire government declined to comment.


Join the Conversation...

There are comments posted so far.

If you'd like to join this conversation, please login or sign up here

Related Articles