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Eric Ng

Peggy Sito

Citic Pacific chairman Larry Yung Chi-kin's resignation this week has turned the spotlight  on other Yung family members at the company who may be removed  to restore investor confidence.
Market observers speculated that Mr Yung's three children - Carl Yung Ming-jie, Frances Yung Ming-fong and Andy Yung Ming-tai - are likely to leave the company soon.
'I would be surprised if they stay,' shareholder activist David Webb said. 'They wouldn't have worked there if not for their father. If the son [Carl] stays on the board, it would look like he is acting as a proxy of his father.'
Mr Yung's  daughter, Frances, was demoted and received a pay cut on October 21 last year. A day earlier,  Citic Pacific revealed it had entered into huge leveraged foreign-exchange contracts on which  it booked a  loss of HK$15.89 billion.  
Soon afterwards, the Securities and Futures Commission and Hong Kong Exchanges and Clearing  began investigations into the  deals.
Citic Pacific was criticised for waiting six weeks after the board  learned of the money-losing contracts before publicly disclosing them, leaving shareholders in the dark and potentially creating opportunities for insider dealings.
On April 3, the Commercial Crime Bureau searched  the company's offices, seized documents and asked its directors to help investigations into allegations that board members had made false statements and conspired to commit fraud in connection with the foreign-exchange contracts.
Ms Yung was demoted  for  her role in the  deals as the head of the company's  finance department, former managing director Henry Fan Hung-ling  said at the time,  insisting no fraud or illegal activity  was involved.
The company has not disclosed what position she  now holds or the amount of her salary cut. Ms Yung, who joined Citic Pacific in 1995, is not a member of the board, and it is not mandatory for the  group to disclose the information.
Former board members Leslie Chang Li-hsien  and Chau Chi-yin resigned as deputy managing director and executive director, respectively, taking responsibility for failing to obtain approval  and  to notify the chairman about   the foreign-exchange deals, Citic Pacific said in October.
Mr Fan said Ms Yung, who failed to inform her father about the transactions, reported to Mr Chang.
Her older brother Carl is a deputy managing director and a board member. He is mainly responsible for the company's mainland property business but is also a director of other group companies responsible for mainland infrastructure and special steel projects.
Younger brother Andy works as a personal assistant to the chairman. Larry Yung's children all started their careers in the company in that capacity,  an employee said.
A source close to the company said it  was possible the siblings  would resign in the future. 
'The change within such a short time is a big and unexpected setback for the family,'  the source said. 
'They need time [to decide their next move].'
The spokesman for Citic Pacific declined to comment.
Another relative of Mr Yung under the Citic Pacific umbrella is Zhang Yichen, the chief executive of investment management company Citic Capital Holdings, which is  50 per cent owned by Citic Pacific and  50 per cent by Citic International Financial Holdings.
Mr Zhang's wife is Qi Peiwen, a niece of Mr Yung. Mr Zhang was invited by  Mr Yung to join Citic Pacific in 2000 as an executive director and was in charge of its telecommunications business. He was appointed to set up Citic Capital two years later.
It is understood that a team of Citic Group executives have come to Hong Kong to  examine  Citic Pacific's businesses thoroughly to see if there are further irregularities and to  consider plans to restructure  the company.
'Everything seems to be fine so far. No Citic [Group] people from Beijing have visited us,' a source close to Citic Capital said.
Who?s on board
Chang Zhenming: Chairman and managing director; vice-chairman and president of Citic Group
Executive directors
Peter Lee Chung-hing (deputy managing director), Carl Yung Ming-jie (deputy managing director), Vernon Moore, Li Shilin (director and vicepresident of Citic Group), Liu Jifu, Milton Law Ming-to, Wang Ande, Kwok Man-leun
Non-executive directors:
Willie Chang, Andre Desmarais, Zhang Jijing (director of Citic Group), Ju Weimin (director and chief financial officer of Citic Group) and Peter Kruyt
Independent non-executive directors:
Hamilton Ho Hau-hay, Alexander Hamilton, Hansen Loh Chung-hon and Norman Ho Hau-chong
Larry Yung Chi-kin?s family links
Carl Yung Ming-jie (son, deputy managing director) 
Frances Yung Ming-fong (daughter, former director of group finance)
Andy Yung Ming-tai (son, assistant to the chairman)
Zhang Yichen (nephew-in-law, chief executive of Citic Capital Holdings, jointly controlled by Citic Pacific)
Source: Bloomberg



Younger Yungs at Citic Pacific may get the axe