The company approached four banks seeking to borrow a total of HK$2.55 billion and obtained HK$1.75 billion in loans from three of them before the announcement, the court heard.

The Agricultural Bank of China refused to grant a HK$800 million loan after discovering Citic Pacific's substantial loss in a public announcement published on October 20, 2008.

Draycott was representing the Commissioner of Police on the first day of a hearing in the Court of First Instance in which Citic Pacific is seeking to prevent the use of documents that the Commercial Crime Bureau seized from its headquarters in Central in 2009.

Lawyers for Citic Pacific said some of the documents should not be disclosed.

Paul Shieh Wing-tai SC said some of the 'hundreds of thousands of boxes of documents' police seized were subject to legal professional privilege and therefore the police should not have access to them.

Legal professional privilege is a legal right protecting all communications between a professional legal adviser and his clients. Shieh said there were also documents that fell outside the scope of the court warrants, which authorised the bureau to seize the papers.

The court yesterday first dealt with six documents that the company had earlier handed over to the Securities and Futures Commission for investigation, although those documents were subject to legal professional privilege.

Shieh said the documents, including the minutes of the board of directors' meetings, and letters and notes of legal advice, were given to the SFC on the condition that legal professional privilege be partially waived only.

'The buck stops at [the SFC]. The documents are for the SFC and not for passing on to police,' he said.

He said the disclosure was made because Citic Pacific wanted to co-operate with the SFC in the interests of the company. Use of the documents was limited to the SFC investigation, but not for further proceedings or criminal investigations. However, Draycott said the company had waived the privilege and could not reinstate it.

Also, because the documents were linked to a criminal investigation, the privilege had been lost, she said.

'This is a matter that needs to be brought before the criminal court expeditiously.

'Who are to be charged should be charged quickly.'

Draycott said too much time had been wasted and the investigation had been stalled, preventing further examination of the documents, since Citic Pacific lodged its challenge to police access to the papers.

She said any further delay would be unsatisfactory and would not be in the interest of the shareholders.

Draycott's revelation of Citic Pacific's efforts to obtain the loans was based on statements given by a police officer who had taken part in a raid on the company.

Shieh described the revelation about the loans as a 'complete ambush' and accused Draycott of 'topping up' the statements by disclosing extra information.

He asked the court to adjourn the matter to seek instruction from his clients to see if they would object to the submission of the statements.

The case continues before Mr Justice Alan Wright.

In 2009, three shareholders claimed at the Small Claims Tribunal that they lost money when they sold shares after Citic Pacific disclosed its currency trading.

Shares of the company slumped 55 per cent on October 21, 2008, a day after the disclosure.

Red alert

The Agricultural Bank of China refused to grant Citic Pacific a loan of HK$800 million in 2008

The company had sought to borrow from four banks, in HK dollars, a total of: $2.55b