Role of Citic director in currency bets queried
Embattled Citic Pacific, which is seeking shareholder approval for an HK$11.6 billion bailout, yesterday dismissed talk that another top executive was involved in making unauthorised currency bets that have already cost two directors their jobs.
The latest information from the steel-to-property conglomerate on 24 'foreign exchange accumulator' contracts it entered into with 13 banks between July last year and September this year showed executive director Vernon Moore signed some of the contracts.
The revelation followed a decision by Citic Pacific to sack two executive directors for their involvement in the unauthorised currency bets - group finance director Leslie Chang Li-hsien and financial controller Chau Chi-yin. When it first unveiled the dealings in October, it said no other directors were involved.
In addition, the latest information shows that in a contract signed with the Calyon Hong Kong branch, one of the signatures looks like that of Frances Yung Ming-fong (above), daughter of Citic Pacific chairman Larry Yung Chi-kin.
Ms Yung was demoted because of her involvement in the unauthorised bets, which saw total estimated losses for the firm on its highly leveraged foreign exchange contracts rise to HK$18.6 billion as of November 26, from HK$16.8 billion on November 11 and the HK$15.5 billion loss it estimated on October 20, because of the continued weakness of the Australian dollar.
Market watchers questioned whether Mr Moore was also involved in the currency bets and wondered why Citic Pacific had taken no action against him, instead appointing him to succeed Mr Chang.
A company spokesman said: 'Mr Moore is not responsible for decision-making on conducting the foreign exchange deals. Mr Chang was.'
Although Mr Moore was one of the company officials authorised to sign legally binding contracts, his duty was just to confirm the foreign exchange contracts done by the finance department, she said.
However, Kenny Tang Sing-hing, the head of research at Redford Asset Management, said Mr Moore should have known the details of the contracts as he had signed them, and as an executive director he should have raised an alarm over the possible risks associated with the contracts.