Ex-Citic Pacific’s Chui Doesn’t Testify in Insider Trial
Chui’s lawyer Joseph Tse told Hong Kong’s Eastern Magistrates’ Court today there would be no defense witnesses. Chui has pleaded not guilty to two counts of selling a total of 81,000 Citic Pacific shares after, according to the Securities and Futures Commission, becoming aware of losses from foreign exchange bets before the company announced them.
Citic Pacific, controlled by China’s biggest state-owned investment company, fell 55 percent on Oct. 22, 2008, after the steelmaker and property developer disclosed that it may have incurred losses of as much as HK$15.5 billion ($2 billion) from wrong-way currency bets. Chui, who sold the shares on Sept. 9 and Sept. 12 after getting the confidential information, avoided losses of as much as HK$1.36 million, the SFC said.
Chui faces a sentence as long as two years in prison, the maximum penalty for a case in the magistrates court. His lawyer today submitted facts to the court including instructions from Chui’s wife to sell an apartment they co-owned and Chui’s immigration record.
The prosecution’s case had been presented over at least six days. Magistrate Li Kwok-wai scheduled closing submissions for Sept. 21.
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 trial 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 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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