By Tom Bergin
LONDON, April 8 (Reuters) – The government of the
semi-autonomous Kurdish region of Iraq has confirmed that it
received emails from a senior JP Morgan banker that the
UK financial regulator said constituted market abuse.
The banker, Ian Hannam, who was JPMorgan’s London-based
global chairman of equity capital markets, was later fined
450,000 pounds ($712,400) by the Financial Services Authority
(FSA) and has since resigned.
Sources had told Reuters on Friday that Ashti Hawrami,
Minister of Natural Resources for the Kurdistan Regional
Government (KRG), was the previously unidentified “Mr. A” who
received emails from Hannam containing privileged information on
the banker’s client, Heritage Oil. The FSA said the
information could have been used to unfair advantage in the
markets.
The KRG said it had contact with Hannam “at various levels”
during the period when the emails were sent.
“The KRG confirms that the information identified by the FSA
contained in the two emails was unsolicited, and further
confirms that neither the KRG, nor any representative of the
KRG, responded to that information or took any action as a
result of that information,” it said on Saturday.
The first email, sent in September 2008 to Mr A, contained
information about a potential takeover bid for Heritage, while a
second, a month later, was sent to Mr. A and an unidentified Mr.
B and included information on an oil find Heritage had made.
The FSA said the email to Mr. A represented a serious matter
partly because Mr. A could have advised his organisation to buy
a stake in Heritage.
Around the time of the emails, the KRG did buy a stake in
another Kurdish-focused explorer, Norway’s DNO International
.
Hannam, a gruff former special forces soldier, is one of
Britain’s most successful investment bankers and is appealing
against the fine.
Heritage has declined requests to comment on the matter.
The Kurdish region has emerged as an area of keen interest
for international oil companies after years when it was mainly
only a focus for small, independent players such as Heritage.
However, the area’s image has been damaged by a series of
high-profile lawsuits and regulatory probes in Norway and the
UK.
A spokesman for the KRG declined to provide further details
on the matter.
“The KRG considers this to be a UK regulatory matter between
the FSA and Mr Hannam, and has nothing further to add,” the
statement added.
Spokesmen for Hannam and JPMorgan have declined to comment.
