(Letter) The Fall Of CITIC Pacific
Filed under:-mini-posts | Tags:hong kong, SOE
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Yesterday its share price fell by 55% and its valuation is down from HK$31 billion to HK$14 billion.
Today its market capitalization fell another 25% to HK$10 billion.
Hong Kong-based CITIC Pacific was reported that it may lose HK$15 billion due to bad bets on Australian currency.
Larry Yung, Chairman of CITIC Pacific, apologized personally and on behave of the board of directors for the loss.
Group finance director Leslie Chang Li-hsien and group financial controller Chau Chi-yin resigned.
One day later, Frances Yung, daughter of board chairman Larry Yung, director of group finance, was demoted and transferred out of the department, to be reassigned.
News media have called CITIC Pacific state-owned. But it’s been run like a family business. The wholly state-owned CITIC Group is the biggest shareholder and owns 29% of Pacific, and Larry Yung owns 19%.
Yung is chairman of the board of directors. His son Carl is also an executive director and deputy managing director. His daughter Frances was director of group finance until she was demoted yesterday to take her share of the responsibility.
Although CITIC Group had a 29% stake, its management, led by chairman Kong Dan and president Chang Zhenming, failed to safeguard its interest in Pacific.
It was reported that Larry Yung is going to Beijing to secure a standby loan of HK$12 billion from its parent company CITIC Group.
Is this right, considering that now CITIC Pacific is only valued HK$10 billion and the parent company already owns 29%?
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October 23rd, 2008 at 11:52 am
Larry Yung is reportedly asked to resign by CITIC Group but CITIC Pacific denied the report on Apple Daily.
October 23rd, 2008 at 2:22 pm
Oh wait – so this report comes from Apple Daily? Not exactly a reputable source on finance, more the kind of paper I might refer to If I want to see who Edison Chen’s been into of late!
October 23rd, 2008 at 3:06 pm
another case of putting all eggs in one basket?
October 24th, 2008 at 12:38 pm
It’s incompetence and nepotism ran amok in the company.
October 27th, 2008 at 2:59 am
There is an awful amount of bullsh*t flying around this debacle and a whole host of unanswered questions. Basically what we are seeing is a a huge coverup of management incompetence and blatant nepotism.
I mean, what is the difference between Group Finance Director (according to the 2007 Annual Report not actually a position, yet somebody was booted for being Group Finance Director) and Director, Group Finance (the job given to Chairman daddy’s little girl and who, according to daddy, could not have been responsible cause she was too busy traveling.
This is just so 3rd World.
October 27th, 2008 at 3:14 am
If I want to see who Edison Chen’s been into of late!
@ FOARP…I’ve been away too long…you are right about Apple Daily.
SO….who has the lucky bee, Edison been into of late?