Ex-Citic Pacific Executive Chui Jailed for 15 Months
Magistrate Li Kwok-wai sentenced Chui yesterday to 18 months in prison, less one month in recognition of his personal character and two months for the delay of the trial. He also ordered Chui to pay about HK$229,000 in costs.
Chui, who left Citic Pacific for Agile Property Holdings Ltd. (3383) in 2010, was convicted on Oct. 26 of two counts of selling shares in the Chinese steelmaker in 2008 before the company issued a public statement disclosing potential losses of as much as HK$15.5 billion from wrong-way currency bets. He left Agile on the day of his conviction, according to a statement from the company’s representatives.
Citic Pacific, controlled by China’s biggest state-owned investment company, fell 55 percent on Oct. 22, 2008 after its announcement. Chui sold a total of 81,000 shares on Sept. 9 and Sept. 12 and avoided losses of as much as HK$1.36 million, according to Hong Kong’s Securities and Futures Commission.
Chui’s lawyer Joseph Tse said his client had not decided if he will appeal the sentence.
Chui worked at Citic Pacific until June 30, 2010, according to the SFC. He joined Agile in July 2010 to handle accounting, corporate finance, and investor relations.
Agile has no immediate plans to appoint a new chief financial officer to replace Chui, according to the e-mailed statement from iPR Ogilvy, which handles public relations for the Hong Kong-listed developer. Financial controller Janus Lui is filling in the role, according to the statement.
Citic Pacific’s bets on the Australian dollar prompted a bailout from its parent Citic Group, which is backed by China’s cabinet, and the resignation of its then chairman Larry Yung.
Hong Kong’s Department of Justice said last year, during a court hearing over disputed documents, that there was “clear evidence” Citic Pacific defrauded four banks before Oct. 20, 2008, when it sought financing without disclosing the losses.
Citic Pacific directors acted properly, a lawyer for the company has said. The company declined to comment yesterday, according to Elizabeth Xu, a Hong Kong-based spokeswoman at Brunswick Group, which handles media relations for Citic Pacific.
Citic Pacific entered into the currency contracts to hedge its exposure to the Australian dollar as it was developing an iron ore mine in Australia’s Pilbara region.
The case is Securities and Futures Commission and Chui Wing Nin, ESS27729/2011 in Hong Kong’s Eastern Magistrates’ Court.
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