'Sensitive' announcement halts CITIC Pacific trading
Updated: 2008-11-01 07:36
By Hui Ching-hoo(HK Edition)
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CITIC Pacific will soon make an announcement that it said may affect its stock price. Therefore, trading of its shares was halted following the afternoon break on Friday. AFP |
CITIC Pacific's shares were suspended from trading Friday amid market speculations that mainland and Hong Kong watchdogs have joined forces to investigate the company's unauthorized currency bets.
CITIC Pacific yesterday said that the company is waiting to release an announcement that might be sensitive to its stock price. So trading of its shares was halted after the afternoon break.
The suspension coincided with the rumor from mainland media that China Securities Regulatory Commission (CSRC) and Hong Kong Securities and Futures Commission (SFC) have jointly opened a probe into the wrong-side bets of CITIC Pacific that led the company to suffer a HK$15.5 billion writedown.
The rumor also indicated that the regulators will soon make the investigation's results public.
CITIC Group, the parent group of CITIC Pacific, yesterday dismissed the speculation, with a spokesman saying: "We've never heard of the news. As far as we know, the Hong Kong regulator has kicked off the investigation".
"The parent group will fully support CITIC Pacific. The company performs very well in different aspects and we believe that the company is capable of coping with the problem," he said.
Secretary for Services and the Treasury KC Chan refused to comment on the incident, aside from saying it won't tarnish Hong Kong's reputation as a global financial center.
CITIC Pacific shares soared 20 percent to HK$6 before the suspension, but it is still far from recovering the loss since the failed trading unfolded on Oct 20.
Ricky Cheung, executive and president of Enlighten Securities and Futures, said that the outlook of CITIC Pacific's stock remains uncertain. "Although the company's shares are undervalued, I think investors should adopt a wait-and-see approach until the incident comes to a conclusion."
In addition, a legislator conveyed a letter to SFC on behalf of a group of CITIC Pacific's shareholders. The shareholders urged Financial Secretary John Tsang to investigate the internal operations of CITIC Pacific.
CITIC Pacific announced on Oct 20 that the company made a HK$15.5 billion loss in accumulator trading, despite the company's managers admitting they had been aware of the problem since Sept 7.
As a result, the company's managing director, Henry Fan, stepped down from all of his outside posts, including as chairman of the Takeovers and Mergers Panel and member of the Takeovers Appeal Committee, to avoid conflicts of interest.
(HK Edition 11/01/2008 page2)