Citic Group is expected to remove Larry Yung Chi-kin as chairman of Citic Pacific in the next few days and has sent a team to further investigate the company's huge foreign exchange losses and other possible irregularities, sources said.
The Beijing-backed conglomerate is expected to replace Mr Yung with the group's deputy chairman, Chang Zhenming, and appoint several group senior managers to run various Citic Pacific businesses.
Zhang Jijing, a director and assistant president of Citic Group, will assume a lead decision-making role in the daily operations of the Hong Kong-listed company. He was appointed a non-executive director of Citic Pacific on March 25.
'Citic Pacific is expected to announce Mr Yung's resignation within days and the appointment of the managers from Beijing will be announced at the same time,' a source said.
Citic Group has no immediate plans to restructure Citic Pacific's business because Beijing wants to see if there are other irregularities beyond the wrong-way currency bets.
'Citic Group needed to send a team of people to Hong Kong because it wanted to examine all of Citic's businesses in Hong Kong,' another source said. 'The exercise is not only to punish Larry Yung, and it is not just about money - many of Citic's investments have strategic implications [for the nation].'