HK regulator sues China conglomerate, ex-chairman

AP News
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Posted: Sep 11, 2014 6:46 AM

HONG KONG (AP) — Hong Kong regulators are suing state-owned Chinese conglomerate Citic and its former chairman in a bid to compensate investors over a huge loss related to a bungled bet on Australia's currency.

The Securities and Futures Commission said Thursday that it launched legal proceedings against Citic and five former executive directors for allegedly providing false or misleading information about the company's financial position in 2008.

The commission said it was seeking a court order for compensation for up to 4,500 investors.

Citic lost more than $2 billion after bets on the Australian dollar and other currencies to hedge costs for an Australian iron-ore operation went sour.

Chairman Larry Yung, who comes from Chinese business royalty, was forced to resign following the fiasco.