John Kizon, successful WA businessman, playboy and sporting identity, pictured at a book launch with Roger Rogerson, corrupt NSW police officer, hit man and jailed murderer
AdultShop.com chief executive Malcolm Day misrepresented the affairs of his company during negotiations to buy an internet pornography business in 2001, a District Court jury was told today.
Brisbane based internet entrepreneur Dean Shannon, who has been described by Mr Day as a genius on the net, said he felt bullied during negotiations that ended with AdultShop.com buying Mr Shannon’s adult entertainment business for a mixture of shares and $1m cash.
Mr Shannon said he was told by Mr Day that a form of financial checking known as due diligence could not be carried out on companies that were listed on the stock exchange.
“I was stupidly naive in relation to listed companies,” Mr Shannon said.
Mr Shannon spoke of his dealings with Mr Day at the start of his testimony in the trial of Perth businessman John Kizon and Nigel Mansfield on charges of insider-trading in AdultShop and internet gaming company My Casino.
The alleged insider information possessed by Mr Kizon, Mr Mansfield included expectations that AdultShop would report very strong profit growth from the Adult Entertainment business bought from Mr Shannon and his business partner Steve Jones.
There are a couple of famous racing, legal and business names in this Year 9 St Paul’s School photo of Jed/Ned Shannon for those with a good memory and a sharp eye
The jury was given plenty of hints during the trial about problems with the information allegedly conveyed by Mr Day about the profit and revenue growth AdultShop.com was supposedly enjoying, about Kerry Packer supposedly holding a 4.9 per cent stake and about influential share tipster Rene Rivkin being interested in the pornography group.
In front of the jury, Mr Kizon’s defence lawyer Stephen Shirrefs read with some relish an email in which Mr Day boasted about having attended a wedding of Multiplex heiress Denby Roberts and using the happy occasion to sell the AdultShop story.
In another email read by Mr Shirrefs, Mr Day also told pornography division boss Dean Shannon about his hosting a party on a boat cruise with big hitters at which the agenda included female entertainment, alcohol and a barbecue.
When the jury was absent, the defence team stepped up their attack on Mr Day and Mr O’Donnell as part of a push to have most of the conspiracy and insider trading charges thrown out.
Mr Mansfield’s lawyer Martin Bennett said the charges were based on lies.
Even an announcement made by AdultShop to the stock exchange in May, 2002 about its expected profit and revenue growth was false.
He said the evidence from Mr Shannon showed that the figures were plucked out of thin air.
They were exposed in September, 2002 as the “fiction they had always been” when the company reported a loss instead of a profit.
He said the charges relating to AdultShop were full of lies.
In situations where lies had been told, Mr Bennett told Judge John Wisbey that the normal way to preserve the integrity of the sharemarket was to prosecute the liar and not the victim of the lie.
There are some famous racing, legal and business names in this Year 9 St Paul’s School photo of Jed/Ned Shannon’s school mates as well, and a dead ped. See if you can spot them.