Citic Pacific has been dealt a new blow in its long-running battle to stop the Hong Kong police from investigating the company for fraud over a disastrous derivatives loss that the company delayed disclosing in 2008.
The High Court, in a judgment published yesterday, turned down the Beijing-backed steelmaker and property developer's bid to avoid paying legal costs for an earlier court hearing involving law enforcers in March over evidence.
Citic Pacific lost that case in which it attempted to restrict police access to files relating to a HK$15.5 billion loss it made in September 2008 from an unauthorised, wrong-way bet on the future price of the Australian dollar. Citic's board knew of the loss by September 7, 2008, but did not announce it until October 20 that year.
On March 18, Mr Justice Alan Wright ruled the police could see the files. Citic Pacific began a separate action attempting to avoid paying the police's costs for the March hearing.
In his judgment, Wright said the state-owned enterprise must pay three-quarters of the legal fees of the Secretary for Justice and the Commissioner of Police, which people involved in the case estimated would be less than HK$1 million.
Citic Pacific had argued it should not bear the winning side's costs because lawyers for the justice department and the police had asked for some evidence too late. Wright wrote that he 'did not regard that to be a realistic submission'.