Money Matters | SFC action hands ex-Citic Pacific directors a get-out-of-jail-free card
A criminal case against Citic Pacific directors who oversaw huge losses would be far harder for the authorities to pursue than civil action
Former Citic Pacific chairman Larry Yung Chi-kin and the company's then-directors are unlikely to face criminal prosecution for telling the market its finances were in good shape as it suffered a HK$15 billion trading loss in 2008.
That's the unwritten message from the Securities and Futures Commission's civil action against the princeling and his four former subordinates.
And that's not sheer guess work, but laid out in the law.
The Secretary for Financial Services and the Treasury Chan Ka-keung told the Legislative Council in 2010 in regard to the Citic investigation that if a criminal prosecution was not to be pursued, the SFC would be advised on whether the case should be referred to a Market Misconduct Tribunal (MMT).
"The sequence is important since the Securities and Futures Ordinance makes clear that a person cannot be prosecuted for a criminal offence … at the same time as he is being subjected to civil proceedings for the same conduct before the MMT," Chan said, talking about the so-called "double jeopardy" provision.
The decision by the SFC to bring Citic Pacific's alleged distribution of "materially false or misleading information" before the tribunal is therefore tantamount to an announcement that the five men will not face criminal prosecution on the same matter.