Citic Pacific fights on to block fraud investigation
Citic Pacific yesterday renewed its two-year effort to block a police fraud investigation into its failure to disclose a HK$15.5 billion loss immediately in 2008.
The Hong Kong-listed, Beijing-backed steelmaker and property developer appealed against a court order that it surrender six documents containing confidential legal advice to police for a criminal investigation.
Lawyers for Citic told the Court of Appeal that the Court of First Instance had erred in law in ruling that the documents had lost legal professional privilege - a right protecting communications between a legal adviser and his client from disclosure without the client's permission.
The case stemmed from Citic's announcement, delayed by six weeks, of losses from a botched investment in the Australian dollar and an allegation that it had borrowed HK$1.75 billion from lenders without disclosing the huge loss.
In the aftermath, police raided the Hong Kong office of Citic Pacific, which is part of the massive Citic conglomerate, in April 2009 and seized boxes of files and computers.
In March, Mr Justice Alan Wright ruled that there was a prima facie case of the existence of conspiracy to defraud. He said the documents should be passed to police because legal advice used to facilitate fraudulent acts was excluded from privilege.
Collingwood Thompson QC, for Citic, argued yesterday that privilege of documents would be lost only when there was a 'strong prima facie case' of fraud with 'very compelling evidence'. Thompson said police had failed to establish a strong case because they did not disclose the source of the fraud allegation in their documents filed with the court.
He said the court should be cautious in ordering the disclosure of privileged documents.
He said the lower court had not taken into account all the evidence.
The appeal continues before Mr Justice Michael Hartmann, Madam Justice Susan Kwan Shuk-hing and Mr Justice Jonathan Harris.
