Ex-Citic Pacific exec Simon Chui stands trial for insider trading
Former finance executive is accused of selling company shares before 2008 profit warning
The securities watchdog is prosecuting a former Citic Pacific senior executive for insider dealing after he allegedly sold shares ahead of a profit warning in 2008, a Hong Kong court heard yesterday.
In the Eastern Court before Magistrate Li Kwok-wai, the Securities and Futures Commission (SFC) began a prosecution of Simon Chui Wing-nin, a former assistant director in Citic Pacific's finance department, for two counts of insider dealing. Chui has pleaded not guilty.
The SFC said Chui, as assistant director in the finance department of Citic Pacific, a Beijing-backed steelmaker and property developer, was involved in the company's foreign exchange forward contracts, including on the Australian dollar against the US dollar to hedge its business exposure in Australia.
The regulator alleged that he sold a total of 81,000 Citic Pacific shares through two brokers, ICEA Securities and South China Securities, on September 9 and 12, 2008.
The sales came after he learned early that month from information from his work and e-mails from his colleagues that the company had suffered huge losses from a wrong bet on the future price of the Australian dollar. This included realised losses of HK$808 million for the contracts terminated as well as a HK$14.7 billion marked-to-market loss on its outstanding excessive foreign exchange forward contracts.
Citic Pacific, however, released the information to the public only in a profit warning announcement on October 20, 2008. Chui, who allegedly sold the shares ahead of the losses being made public, was thus able to prevent himself from suffering losses in his shareholding in the company.
