HONG KONG: The Small Claims Tribunal Friday adjourned the hearing on a minority shareholders' suit against former Citic Pacific chairman Larry Yung Chi-kin to allow time to debate whether the case should be tried by the High Court.
Three stock investors, Joseph Leung, So Wai Ching and Wong Kam Wan, brought a suit against the tycoon in October. The plaintiffs claimed they had lost about HK$40,000 each, because the conglomerate failed to disclose its high-risk investments in foreign currencies in a timely manner.
Steel-to-property conglomerate Citic Pacific announced in October last year that unauthorized trading of derivative contracts on foreign currencies could cost the company up to HK$15.5 billion losses.
The trio accused Yung, who resigned from Citic Pacific in April, of misleading the public. The plaintiffs pointed to Yung's signature on a company statement dated September 12, 2008. The statement said there were material adverse changes in the financial or trading position of the group.
Yung filed an application on November 13 to have the case transferred to the High Court, saying it involves "difficult and intertwined issues of law and fact" and if he lost it may "set up a precedent and lead to a spate of cases against Citic and me."
The three claimants objected to the application to have the case raised to the High Court Friday, arguing they could not afford the legal expenses of a High Court suit. No lawyers are required for tribunal cases.
Adjudicator Wong Lai-wing Friday ordered the plaintiffs to submit their objections in writing in three weeks and gave Yung two weeks after that, to respond. The next hearing was scheduled on January 5.
So said the main purpose of the suit was to arouse public attention and make the government step up its probe into the Citic Pacific affair.
"Of course we hope for compensation. Neither are we excluding the possibility of suing other company directors. But we hope the government would speed up its investigation and give the public an explanation. If the investigation hadn't dragged on for so long, we wouldn't have to go to the High Court," he said.
The Securities and Future Commission (SFC) and the police have launched separate investigations into the Citic Pacific currency bets. SFC has just concluded its inquiry while the police's is ongoing.
Acting Secretary for Financial Services and the Treasury Julia Leung Fung-yee told the Legislative Council on November 18 the Department of Justice will weigh the findings of both before deciding on whether to bring charges.
Legislator James To Kun-sun, who is assisting the claimants, said they may apply for legal aid if the case has to be moved to the High Court.
He added more than 100 minority investors are seeking damages and this lawsuit will set a precedent.
Yung is one of the richest men of the country and has announced a plan to start a new venture after leaving Citic Pacific.
China Daily/Bloomberg News
(HK Edition 11/21/2009 page1)