Minority shareholders urge securities watchdog to appeal Citic misconduct ruling

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Lawmaker James To Kun-sun has helped about 200 Citic small shareholders who suffered losses to seek redress

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Lawmaker James To (second from left) and Citic’s small shareholders have urged the SFC to appeal against a ruling by the Market Misconduct Tribunal that cleared former chairman Larry Yung and four other ex-directors of misconduct and of providing misleading information over losses from foreign-currency bets in 2008. Photo: Felix Wong

Eric Ng

Published: 8:44pm, 27 Apr 2017Updated: 10:45pm, 27 Apr 2017

Minority shareholders of Citic Ltd have urged Hong Kong’s financial market watchdog to appeal against a ruling by the Market Misconduct Tribunal that cleared former chairman Larry Yung Chi-kin and four other ex-directors of misconduct and of providing misleading information to the investing public over massive losses from wrong-way foreign-currency bets in 2008.

“The Citic case has implications for the wider public interest besides those of its small shareholders,” said lawmaker James To Kun-sun, who has helped about 200 Citic small shareholders who suffered losses to seek redress.

“If the Securities and Futures Commission does not appeal, the case may become a reference case under common law, affecting its future regulatory work over governance of listed firms.”

Citic is China’s largest conglomerate and its first state-backed firm to tap overseas capital markets to fund business expansion.

It was led by Yung, a son of the late Rong Yiren, who was dubbed the “Red Capitalist” and China’s vice-president from 1993 to 1998.

Larry Yung is among Citic’s executives cleared of misconduct by the Market Misconduct Tribunal. Photo: Kenneth Chan

Citic, then known as Citic Pacific, announced on October 20, 2008, that it had made a potential HK$15.5 billion (US$2 billion) loss from “unauthorised” foreign-currency trades, six weeks after management claimed they first learned about losses from such trades on September 7.