Former Citic Pacific chairman Larry Yung Chi-kin has reportedly sold a large part of his stake in the troubled red-chip conglomerate for HK$732 million, a sign his two-decade involvement in the company may be coming to an end. Mr Yung resigned as chairman and director of Citic Pacific last month along with managing director Henry Fan Hung-ling after police raided the company's office as part of a probe into wrong-way bets on foreign currencies. Fears that those bets may have cost Citic Pacific up to US$2 billion prompted an executive shake-up at the company, with Beijing reasserting its control over the firm. The company's controlling shareholder, Citic Group, was established in 1979 as the central government's first overseas investment arm. Market sources said yesterday Mr Yung had successfully offloaded 14 per cent of his holdings in Citic Pacific, cutting his stake to 9.93 per cent of the firm from 11.53 per cent. Separately, sources said Citic Pacific was attempting to reduce its holdings in non-core investments by selling its stake in China Railway Construction Corp for HK$230 million through a private placement. Fund managers expect Mr Yung will further reduce his stake while Citic Group will play a leading role in an anticipated restructuring of the company. 'It should be good news for Citic Pacific as it can reduce the personal image of Mr Yung in the firm and give investors hope that the parent firm will do something good,' said Patrick Yiu Ho-yin, the managing director of CASH Asset Management. Mr Yung, the second-largest shareholder in Citic Pacific, hired Morgan Stanley to offer 60 million Citic Pacific shares at the top end of HK$12.20 each, according to an allocation document. The offering represents a 7.58 per cent discount to the stock's close of HK$13.20 yesterday. Mr Yung had initially offered the shares at between HK$11.95 and HK$12.20. 'The deal saw strong demand and the order book was closed within an hour. The book was more than five times covered with strong interest from new investors including mutual funds, hedge funds and private wealth management clients,' said a source. Despite the offering, Mr Yung still remains a considerable presence on the company's share register. After the completion of the sale, his holding in Citic Pacific is still worth about HK$4.8 billion. But question marks over the company's currency losses as well as the police probe mean Beijing is expected to be keen to push him further to the sidelines. On October 20 last year, the company disclosed it could lose up to HK$15.5 billion from 'unauthorised' trading in high-risk, complex futures contracts on the Australian dollar, euro and yuan. Chang Zhenming, a vice-chairman and president of Citic Group, was later appointed chairman and managing director of the listed company. 'Citic Pacific needs changes and we expect those changes from the parent firm could help it to be more energetic and diversified,' said Chan Yuk-keung, a fund manager at Phillip Asset Management. 'The [Yung's sell-down] is a positive catalyst to the stock in the near term and it can help investors to focus more on the company's fundamentals.' Citic Pacific shares have slumped 41.72 per cent since the beginning of October last year. Meanwhile, China Automation Group was seeking to raise as much HK$206 million through a top-up share placement to fund production line expansion, sources said. The company hired CLSA and Daiwa Securities to sell 86 million new shares for between HK$2.30 and HK$2.40 a share, according to a sale note given to fund managers. Consen Group, the controlling shareholder of China Automation, was selling 40 million shares at the same price range.