A Garda investigation into potential insider trading, which first emerged a year ago, is focused on suspicious dealing in Applegreen shares before the announcement in late 2020 that the company had received a takeover approach, The Irish Times has established.
A spokesman for An Garda Síochána said the investigation – under which two men were arrested and questioned by officers last November, before being released – remains active. However, he declined to comment on details of the case.
The two men that were arrested are in no way connected to Applegreen, one of the largest fuel and forecourt retailers in the Republic.
Information on corporate deals can sometimes leak – often unintentionally – as the circle of individuals aware of a potential deal expands, including external advisers and other third parties. However, it is illegal to trade shares on the basis of non-public, price-sensitive information.
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The Irish Times reported last year that the individual at the centre of the investigation, who cannot be named for legal reasons, is a veteran of the State’s international funds sector. The other is said to be a broker who worked for the suspect.
Applegreen announced in December 2020 that its co-founders and US private equity giant Blackstone had come together to make a takeover offer that would take the company off the stock market. It subsequently emerged that the initial bid approach to independent directors of the Applegreen board had been made that August.
The indicative offer represents a 48.2 per cent premium to the price at which Applegreen’s shares closed the evening before the announcement. The shares shot up on the news. Applegreen was taken private in early 2021 in a €718 million deal.
Insider trading in Ireland can lead to a maximum of 10 years’ imprisonment and a fine of as much as €10 million, if an individual is convicted on indictment.
Still, sanctions for white-collar wrongdoing remain rare in Ireland.
Last year the first person convicted of insider trading in the State’s history was fined £60,000 (€68,400) at Dublin Circuit Criminal Court.
Declan Service, from Portrush, Co Antrim, pleaded guilty to insider dealing between May 18th and 22nd, 2020, when he used sensitive market information to sell shares before that information was made public.
The court heard that Service, who was suffering from cancer and long-term depressive illnesses, effectively gambled his retirement fund by using inside knowledge to offload his shares in a pharmaceutical company days before buying them again at a discounted rate.
The court heard that Service made a profit of roughly £11,500, which would have increased to £44,000 if he had retained his shares for one year.
The alarm was raised when Goodbody Stockbrokers alerted the Central Bank to suspicious transactions made by Service, who was one of their clients.
Separately in 2022, the president of the High Court confirmed a number of penalties imposed by the Central Bank on high-profile businessman Philip Lynch for insider dealing. This was a civil case.
Mr Lynch was a former chairman of An Post, founding chief executive of listed investment group One51 and long-time boss of another listed business, IAWS.
A panel of assessors set up by the Central Bank recommended he be fined €75,000 and disqualified from being involved in a regulated financial services company for five years, after it found he had contravened the regulations by using inside information to acquire 200,000 shares in cider and beer maker C&C Group for the account of his approved retirement fund.
Mr Lynch’s barrister noted at the time of the court confirmation of the penalties it was an atypical instance of insider trading in that it had not been done for his client to make immediate gains.
