Citic Pacific Report Handed to Hong Kong Prosecutors

"Citic Pacific Report Handed to Hong Kong Prosecutors | AboutHK.Com - More Information About HK"

Bloomberg Hong Kong’s securities regulator concluded an investigation into steelmaker and miner Citic Pacific Ltd. and has given the results to the city’s Justice Department, a government official said. A separate police probe into Citic Pacific continues and prosecutors will weigh findings of both investigations before deciding whether to bring charges, Undersecretary for Financial Services and the Treasury Julia Leung said today. Leung’s remarks, made in response to questions in the Legislative Council, were provided by spokeswoman Terry Wong. “The authorities are still looking into the case,” legislator Albert Ho said by phone today. “It’s too early at this stage to come to any conclusions.” Citic predicted as much as $2 billion in losses from unauthorized currency bets in a stock exchange filing on Oct. 20, 2008. The board learned of the problem on Sept. 7, six weeks before the announcement, which prompted a 55 percent slump in the company’s shares. The SFC began investigating the company shortly after the disclosure. Then-chairman Larry Yung left Citic in April after the police Commercial Crime Bureau raided company offices and demanded information on currency contracts from 2007 and 2008. Elisa Fong of Brunswick Group, Citic Pacific’s public relations agency, declined to comment today on the case, citing the ongoing investigation. The SFC, Hong Kong police and the Justice Department declined to comment. Citic, an investment company with interests in special steel manufacturing and iron ore mining, asked for a bailout late last year from its parent, the Chinese state-owned Citic Group. The parent since has asserted more control over the Hong Kong-listed unit, appointing of one of its executives, Zhang Jijing, as managing director today. The shares of Citic Pacific fell 3.8 percent to HK$21.40 today. The stock has gained 155 percent this year, compared with the 59 percent gain in Hong Kong’s benchmark Hang Seng Index. To contact the reporter on this story: Debra Mao in Hong Kong at dmao5@bloomberg.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it