Chang, Leslie Li Hsien 張立憲
MMT doesn't find market misconduct in CITIC (0267)'s 2008 circular
SFC, 10-Apr-2017
The MMT says the SFC failed to show that the statement of "no material adverse change" (MAC) caused the price to remain stable, and it is irrelevant that if the huge FX loss had been disclosed, it would have crashed the price. The SFC in our view erred in focussing on the "financial position" (the balance sheet) and ignoring the "trading position" (the income statement). The MMT says there hadn't been a MAC in the financial position as the loss, while price-sensitive, was bearable. That's wrong in our view because it takes a creditor's view rather than a shareholder's view of what is materially adverse, and the Listing Rules were written primarily for equities. The MMT didn't examine whether there was a MAC in the trading position, because the SFC didn't ask them to. Time has moved on - it is now civil Market Misconduct to fail to disclose price-sensitive Inside Information, but in 2008 it was just a breach of the Listing Rules.
SFC, 10-Apr-2017
The MMT says the SFC failed to show that the statement of "no material adverse change" (MAC) caused the price to remain stable, and it is irrelevant that if the huge FX loss had been disclosed, it would have crashed the price. The SFC in our view erred in focussing on the "financial position" (the balance sheet) and ignoring the "trading position" (the income statement). The MMT says there hadn't been a MAC in the financial position as the loss, while price-sensitive, was bearable. That's wrong in our view because it takes a creditor's view rather than a shareholder's view of what is materially adverse, and the Listing Rules were written primarily for equities. The MMT didn't examine whether there was a MAC in the trading position, because the SFC didn't ask them to. Time has moved on - it is now civil Market Misconduct to fail to disclose price-sensitive Inside Information, but in 2008 it was just a breach of the Listing Rules.
SFC launches proceedings against CITIC (0267), its former Chairman and executive directors
SFC, 11-Sep-2014
The SFC completed its investigation by 2010, but with the 6-year limit for civil action expiring tomorrow, it probably could not wait any longer for the DoJ to prosecute, so it is taking the civil route via the MMT, and more importantly for investors, it is seeking restoration for those who bought the shares during the period between the alleged false statement on 12-Sep-2008 and the revelation of the FX losses on 20-Oct-2008. Sadly there appears to be no remedy for those who already held the shares on 12-Sep-2008 and relied on the statement in continuing to hold them.
SFC, 11-Sep-2014
The SFC completed its investigation by 2010, but with the 6-year limit for civil action expiring tomorrow, it probably could not wait any longer for the DoJ to prosecute, so it is taking the civil route via the MMT, and more importantly for investors, it is seeking restoration for those who bought the shares during the period between the alleged false statement on 12-Sep-2008 and the revelation of the FX losses on 20-Oct-2008. Sadly there appears to be no remedy for those who already held the shares on 12-Sep-2008 and relied on the statement in continuing to hold them.
Profit warning - losses on exotic foreign exchange forward contracts
Company announcement, 20-Oct-2008
Company announcement, 20-Oct-2008
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