A few weeks ago, Crikey pointed out
the well-timed
sale of shares by ConsMin’s managing director Michael
Kiernan (29 May, item 23). That sale seems even
more prescient now, with ConsMin shares continuing to drop,
closing at only $1.69 yesterday. This is well down from the high of $4.40 they reached last
July.

Kiernan reaped more than $2.6
million from the sale of one million ConsMin shares on 10 May (at an average sale
price of $2.66 per share). Shortly after Kiernan had sold his sizable parcel,
ConsMin announced a profit downgrade and the shares dropped significantly. The news
hasn’t got any better since then, with ConsMin shares continuing their
downward spiral to close at $1.69 yesterday, 36% lower than when Kiernan sold
out little more than one month ago.

What makes the situation murkier is
that this isn’t the first time that Kiernan’s share sales have been exquisitely
timed. In October last year, Kiernan offloaded one million ConsMin shares for an
average price of $4.20 per share, reaping a hefty $4.2 million windfall. If
Kiernan had held onto those shares they would be worth only $1.69 million today
($2.5 million less). Ostensibly, Kiernan claimed the original sale was due to
“fund a residential apartment” and that he “has no requirement to sell any more
CSM shares”. Well, not until the next profit downgrade,
anyway.

While Kiernan can’t be blamed for
selling prior to a market correction, the timing of his two separate sales
raises questions as to his level of knowledge and of the continuous disclosure
regime at ConsMin. Kiernan could probably have got away with virtually
anything while ConsMin’s share price was on fire, but now that the music has
stopped, it is unlikely that investors or maybe even ASIC will be quite so
forgiving.

Adam
Schwab sold off his remaining holding in ConsMin recently, after learning of
Michael Kiernan’s sale.