Hong Kong police named the three banks that lent HK$1.75 billion to Citic Pacific, which was at that time concealing massive losses from a disastrous derivatives bet, repeating their earlier accusation of 'conspiracy to defraud'.
Police said the Beijing-backed steelmaker and property developer borrowed the money from Bank of China, Industrial Bank of China and Japan's Bank of Tokyo-Mitsubishi UFJ in 2008. The loans were made just weeks before Citic Pacific's October 20 admission that it would slip up to HK$15.5 billion into the red because of an unauthorised, wrong-way gamble on the Australian dollar.
'They wanted to raise money and they wanted to do that without disclosing their true financial position,' prosecutor Charlotte Draycott SC said in the Court of First Instance yesterday. 'This is a conspiracy to defraud.'
Draycott said the Citic Pacific board sought legal advice on how to delay the announcement of the loss in order to secure the loans. 'While they kept that information secret from the shareholders, from the public and from the exchange, they went to the banks,' Draycott said.
'They wanted to raise money without telling what their true financial situation was,' she said, 'They repeatedly sought advice from lawyers about how long they could delay.'
The three banks declined to comment, while a Citic Pacific spokesman said the company could not talk about an ongoing court case.
