Probe on Citic bets still unfinished
Hong Kong police have not finished a probe into Citic Pacific's unauthorised currency bets in October 2008 because of the huge amount of documents involved, according to Secretary for Financial Services and the Treasury Professor Chan Ka-keung.
Legislator Albert Ho Chun-yan asked Chan in a Legislative Council meeting yesterday about the progress of the 20-month-long investigation into how the company suffered as much as HK$15.5 billion in losses from unauthorised trading in currency derivatives.
The Securities and Futures Commission finished its inquiry six months ago and has submitted a report to the Department of Justice.
In a written reply to Ho, Chan said the police investigation had not yet been concluded.
'The investigation involves a large volume of documents and computer evidence. Citic Pacific and the directors claimed legal professional privilege in respect of the documents seized and the claim is currently being litigated in the High Court,' he said. 'Since the investigation by both the SFC and the police concern the same set of facts, it is appropriate for the Department of Justice to finalise its advice to the SFC and the police after it has had an opportunity to consider the results of the police investigation.'
Chan said that since the police inquiry had not yet been completed, he could not say whether there would be any criminal prosecution or if the case would be referred to the Market Misconduct Tribunal, a civil court led by a judge and two lay members
He also refused to say whether the police would investigate recent controversy over the company's development project in Hainan province. Of 12 plots of land on offer on the Shenzhou peninsula, Citic Pacific won seven, while two private firms associated with its former chairman Larry Yung Chi-kin won five at an average price of only 700 yuan (HK$798) per square metre - a fraction of the current average price for homes in Wanning city (in which the peninsula is situated) of 6,000 yuan per square metre.
'We would not comment on individual cases,' Chan said.