Citic Pacific

Lee calls Citic Pacific his worst investment

PUBLISHED : Friday, 15 May, 2009, 12:00am
UPDATED : Friday, 28 October, 2016, 9:17am

Henderson Land Development chairman Lee Shau-kee says he is sitting on paper losses of 'hundreds of millions of dollars' after the collapse of troubled Citic Pacific's share price.

Mr Lee yesterday said Citic Pacific was his 'worst investment at present'.

Police are investigating the blue-chip infrastructure firm's wrong-way bets on the Australian dollar which led to the resignations of chairman Larry Yung Chi-kin and managing director Henry Fan Hung-ling.

Mr Lee, who did not say how many Citic Pacific shares he bought and at what price, still holds the stock.

Citic Pacific shares hit a record high of HK$50.45 in October 2007 before plunging to HK$3.55 in October last year. They closed at HK$14.18 yesterday.

'The Australian dollar has gone back up so the company was a hero in picking it,' said Mr Lee. 'However, the pick was ill-fated as it didn't cover the shortfall in the contracts when the currency depreciated sharply in October last year.'

Mr Lee is the first tycoon exposed to Citic Pacific to publicly comment on the troubled conglomerate, which analysts say faces as much as US$2 billion in losses from the currency bets.

Fearing the prospect of inflation 'soon', Mr Lee said he was buying stocks related to mineral resources, oil production, coal mining, energy and real estate. He saw signs of 'hot money' flowing into the stock market, which had pushed the Hang Seng Index above 17,000 points recently.

'The 17,000 level is reasonable,' he said after chairing the annual meeting of Hong Kong and China Gas. 'Take profit when it goes to 20,000 points.'