Money Matters | Citic transparency falls short as Sino Iron swept under the rug
Transparency is lost as acquisition of parent eradicates mandatory disclosure requirements relating to stalled Australian mining project
It has been a year since Citic Pacific’s acquisition of its parent Citic Group, which was billed as the “pioneer” move in China’s new round of state enterprise reform.
So far Citic has announced reforms in a helicopter subsidiary to allow the hiring of a career manager instead of a party cadre as its chief %executive.
This baby step, however, cannot compensate for the significant drop in its transparency following the acquisition.
The new black box is called Sino Iron – a West Australian iron ore mining project that no one has any idea when fully fledged commercial operations will begin.
Thanks to falling mineral prices and poor execution, the project has become a money pit for investor Citic; a shame for state-owned construction company Metallurgical Corp of China (MCC); and a political embarrassment to the country.
Analysts considered it a key mover in Citic’s value. Yet, there is now little to monitor.