Citic Pacific May Lose $2 Billion From Unauthorized Currency Bets

Discussion in 'Wall St. News' started by ASusilovic, Oct 20, 2008.

  1. Citic Pacific Ltd., the Hong Kong arm of China's biggest state-owned investment company, said it may lose as much as HK$15.5 billion ($2 billion) from unauthorized currency bets and replaced two finance executives.

    A loss of HK$808 million has been incurred from terminating some leveraged currency contracts, and it's sitting on further potential losses of HK$14.7 billion, the Hong Kong- listed company said in a filing. Its parent will provide a standby loan of $1.5 billion, it said.

    Citic Pacific joins companies from Brazil's Sadia SA to France's Groupe Caisse d'Epargne in reporting trading losses as the global credit crisis increases financial-market volatility. The company's bets on the Australian dollar incurred losses as the currency tumbled 30 percent against its U.S. counterpart from a 25-year high reached in July.

    ``The incident shows the company has problems in its internal control as it's too big a potential forex loss,'' Kenny Tang, a director of Tung Tai Securities Co., said in Hong Kong. ``The company won't get bankrupted because of its state-owned background but the stock may fall at least 10 percent tomorrow.''

    Trading in Citic Pacific shares will resume in Hong Kong tomorrow after being suspended today, the company said. The potential loss of as much as HK$15.5 billion represents almost half of Citic Pacific's market value.
  2. Suss, When will those two guys be executed or have they already committed suicide? :cool:
  3. Daal


    I dont think they can afford either one :D
  4. what is it with all these sick bastards working at banks?

    I knew they were overpaid mamas boys, but this compulsive gambling is sickening.

    death penalty now.


    Instructions for use: stare at this image for 5 minutes.
  5. one has to wonder why in ANY company, why large trades are not double or triple cross checked by unrelated departments.

    Simple logic: If trade exceeds $$X, departments B, H, and Q must all sign off...
  6. Maybe thats how these banks actually make $, and they only claim it was unauthorized when it blows up.

    Ya gots to think like a crook.