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May 25, 2009 6:20 pm
Citic Pacific, the Hong Kong-listed arm of China’s biggest investment company, said on Monday it would offload some non-core assets.
The move is part of a business review ordered by its new head, who took over following a foreign exchange scandal that triggered a police probe and management shake-up.
Chang Zhenming, who became chairman and managing director in April, also said Citic Pacific would integrate its real estate operations with that of Citic group, its Chinese state-owned parent.
He said: “Businesses that do not generate satisfactory returns or where we cannot actively participate in management, we intend to sell or restructure”.
He added that there was no timetable for any sale.
He said the company would study every operation in terms of market share, the extent of management involvement and synergies with its parent.
In April Mr Chang replaced Larry Yung, former chairman, and Henry Fan, former managing director. They resigned after Hong Kong police raided Citic Pacific’s headquarters as part of an investigation into alleged false statements and fraud at the conglomerate.
Citic Pacific in October said it faced billions of dollars of losses on foreign exchange contracts, which caused the company to report its first annual loss in March.
The Securities and Futures Commission, Hong Kong’s market regulator, began an investigation in October. The police stepped in in April. The investigations continue but no charges have been brought.
Mr Chang said the Australian dollar contracts at the centre of the scandal had been restructured and the company would suffer no further losses.
Mr Chang, also vice-chairman and president of the Citic group, said on Monday the company hoped to find a new managing director in the next few months. He said he would remain chairman “for the long run”.
Following the reorganisation, Mr Chang said Citic Pacific would focus on steel, iron ore and real estate. But he said the company planned to keep its 17.5 per cent stake in Cathay Pacific, the Hong Kong-based airline, and investments in two
tunnels in Hong Kong as they “make important profit contributions”.
He also said the company had earmarked Rmb15bn ($2.2bn) to invest in its steel and iron ore operations in the next two years.
The company has enough cash to finance its future investment and does not have any immediate need to raise funds, according to
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