HK SFC commences proceedings against CITIC, former chairman, executive directors

Hong Kong's Securities and Futures Commission (SFC) instituted proceedings in both the Court of First Instance and the Market Misconduct Tribunal (MMT) against CITIC Limited (CITIC) and five of its former executive directors on Thursday.

According to the SFC, the five former executives are chairman Larry Yung Chi Kin, managing director Henry Fan Hung Ling, deputy managing directors Leslie Chang Li Hsien and Peter Lee Chung Hing and executive director Chau Chi Yin.

The SFC alleges CITIC and the five directors engaged in market misconduct involving disclosure of false or misleading information on CITIC's financial position arising from the massive losses incurred by CITIC over its investment in leveraged foreign exchange contracts in 2008.

The SFC is seeking restoration or compensation orders in the Court of First Instance to restore or compensate up to 4,500 investors who purchased CITIC shares between the date on which the SFC alleges the false or misleading information was announced and the date the true financial position was disclosed. The SFC is also seeking nod for sanction of CITIC and the five directors by the MMT.