Hong Kong’s regulator is pursuing Citic and five of its former directors including Larry Yung, the son of “red capitalist” Rong Yiren, China’s former vice-president, for misleading investors over exactly when the company realised it had lost billions on a currency bet gone wrong.
The civil action comes as Citic has become a flagship for Beijing’s desire to reform its state-owned enterprises after the company’s parent, Citic Group, injected $37bn of assets into its Hong Kong-listed vehicle.
That deal, completed last month, transformed it from an ailing conglomerate dubbed the “red hong” in the 1990s and best known for massive losses on an iron ore venture in Australia, into a $40bn China-focused financial services group.
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