Today CITIC Pacific dropped 55% and it is closed at HKD 6.52 (from HKD 14.52). HKD 17.55 billion of their market cap has been evaporated! Interestingly, this 17.55 billion is very close to the HKD 15.5 billion provision that they have made on the foreign exchange contract.
Also, today David Webb (http://www.webb-site.com/articles/citicbomb.htm) has issued a report on CITIC Pacific, scathing the company for their lack of internal control and that the management should have made this announcement as soon as they were aware of this situation. According to their announcement, they have known about this problem since 7 September 2008. They are not telling the public about this situation for one and a half months. CITIC Pacific has dropped a whopping 74% since the day they knew of the situation. People may wonder if there is any insider making big money from this situation!
