CITIC Pacific dropped another 25% today to close at $4.91. Today’s newspapers seem to put the blame of the forex exchange option losses on the chairman’s daughter, Frances Yung. I’m not sure what good it can make by putting the blame on the chairman’s daughter. The damage has already done to the company and shareholders have suffered already. There is no point putting the blame on someone–and the chairman’s daughter is probably a very easy target because the media just like the sensational idea of an out-of-control chairman’s girl bringing down the company.
David Webb continues to blast CITIC Pacific by issuing another post (http://www.webb-site.com/articles/citicbomb2.htm). And both SFC and HKEx are now investigating the company and the credit agencies are in the process of downgrading the company (I always wonder why they always choose the reactive, rather than proactive, approach in dealing with scandals. What’s the use of credit agencies if they only downgrade companies only when the entire world already knows that something bad has happened to the company?
I really wonder if there will be more scandals on exotic option blowups from other HK-listed companies… Seriously, I’m not surprised if there are a few more saying that they suffer big losses because their directional bets on shares or foreign currencies have gone awry.
