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Citic Pacific former top insider trading case convicted pull out collusion fraud

Posted Oct 29 2012 7:02am

Citic Pacific co., LTD. (hereinafter referred to as "citic Pacific", 00267. HK) former top insider trading convicted, may make it four years ago the Australian dollars derivatives huge deficit of HK $15.5 billion a case of new waves.

On October 26,, citic Pacific finance former assistant  Cheap Beats By Dre  director of the finance department, the competent CuiYongNian a ruling is rendered stating that use inside information buying and selling shares of citic Pacific convicted. The current music this column (03883 HK) chief financial officer CuiYongNian pleaded not guilty, and this year after a case to November 27 sentence. According to law if the accused guilty, CuiYongNian highest can be jailed for three years.

"CuiYongNian" the case's history

August 27,, the Hong Kong east the referee court on insider trading case CuiYongNian launched a 8 trial. According to court case disclosure, citic Pacific have signed a number of foreign exchange derivatives contracts, including some Australian dollars mark redeemable forward contracts to hedge for support a Australian mining subsidiary company operation for citic Pacific brought about by the foreign exchange risk, CuiYongNian is take part in evaluating Australian dollars down to the influence of these contracts.

In late August 2008, bill of exchange rate relative to the contract agreement within the exchange rate has a sharp decline. Cui was estimated to participate in events citic Pacific financial influence, and know that if mark-to-market, citic Pacific will face very significant loss. So CuiYongNian in data be open before selling its holdings of 81000 shares citic Pacific shares, so as to avoid the bear the name of about hk $1.36 million loss.

On October 20, 2008, citic Pacific in port into the published derivatives giant loss  Cheap Beats By Dre  events that mark-to-market loss more than hk $14.7 billion. Included in the already terminate the contract produce loss of hk $755 million, citic Pacific was the most losses up to hk $15.5 billion. Citic Pacific's share price after the announcement of the trading day down answer about 60%.

The Hong Kong securities and futures commission (hereinafter referred to as "Hong Kong securities regulatory commission") regulations ZhiHangBu executive director ShiWeiMin points out, CuiYongNian to dishonest way, use what he held confidential material, will the letter peaceful rich shares almost all write a, is open insider trading behavior. But CuiYongNian pleaded not guilty, and challenge the authority of Hong Kong securities regulatory commission experts, the requirement to accounting involving a value.

Huge deficit in the collusion of fraud

A close to citic Pacific people recently to "first financial daily" said citic Pacific attention CuiYongNian case, citic Pacific existing staff also participated in the witness, so in the trial period has  cheap dre beats  been special arrangement to hearing, evaluate the possible impact of the case.

In fact, our newspaper held a March 18, 2011 Hong Kong higher court judgment and points out, citic Pacific aware and disclosure huge losses apart for at least six weeks, during which citic Pacific was in its big prosperous done notice, issued the "no material adverse change" statement, and the disclosure of losses ago to bank of China, such as icbc lending hk $1.75 billion.

The above judgment says, the surface evidence that citic Pacific involves collusion of fraud, agreed to citic Pacific's some internal important documents including legal advice and the board of directors meeting minutes deblocking for Hong Kong police further investigation.

A close to Hong Kong SFC's people had to our reporter said that the Hong Kong securities regulatory commission to citic Pacific derivatives giant kui case investigation as early as in 2009 and completed. Since the Hong Kong securities regulatory commission will report submitted to the Hong Kong attorney general, remains to be secretary of justice to make a decision whether citic Pacific for criminal prosecution decision, but it has been no progress.

This personage says, CuiYongNian insider trading case is expected to still in citic Pacific to the investigation of the commercial crime bureau officer to provide more evidence. And according to Hong Kong media reported that in the CuiYongNian case during the trial of the Hong Kong commercial crime bureau officer still attention to this event, in CuiYongNian case trial period also have to send audit and record. At the same time, the Hong Kong securities regulatory commission said citic Pacific conceal giant kui time for 54,, more than that of the previous six weeks.

Hong Kong delayed attorney general  cheap beats by dre headpones  of citic Pacific Australian dollars giant kui case make a decision whether to criminal prosecution decision, only has said in the criminal prosecution put forward can consider whether there is sufficient evidence to support the legal procedure, and proposes the prosecution is in compliance with the public interest.

But Hong Kong SFST ChenGuJiang in November 2010 to the legislative council to explain the case said progress, even if there is enough evidence to the surface, but also put forward to support the prosecution. Attorney general must has a reasonable chance to convicted circumstances will put forward prosecution.

Citic Pacific boiling water more than one thing

In fact, citic Pacific derivatives giant kui case "hustle and bustle" four years but has not into "the Lord show". So far in citic Pacific three pieces of cases, respectively is CuiYongNian insider trading case, citic Pacific stop police refer to important evidence case, and citic Pacific chairman of small shareholders forward woman claims case. The above SanAn, Hong Kong securities and futures commission, attorney general and Hong Kong police are to recover at an end, and small shareholders claim case the small shareholders to give up loose ends.

Analysts believe that derivatives huge deficit of the case is still in the haze, but investors now more concerned about the source of all these events - Australia magnetite start situation. Western Australia magnetite project about started in 2007, the original plan completed in 2010, but still not finished and put into production and the situation is not optimistic, especially former chairman of woman to reduce their holdings of shares of the company, make the citic Pacific share price has been pressure.

Citic Pacific chairman and founder of the woman and the former director general manager in Henry fan hung ling on April 8, 2009 resign, by the citic group deputy chairman (now citic group chairman of the board of directors), "fire captain" title ChangZhenMing as citic Pacific chairman and managing director.

The above close to citic Pacific's personage points out, reducing the woman to the outside world made bad signal. The outside world have been think woman and citic Pacific relationship still close, but in fact is not the case. August 22, larry rong to reduce their holdings of about 80 million strands of citic Pacific shares, make its shares fell to 4.98% without disclosure. If that day citic Pacific's closing price of 11.16 Hong Kong dollar, this woman nearly 900 million Hong Kong dollar.

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