How much did daddy's girl know?

How much did daddy's girl know?

10/22/2008, 07:32     [The Standard]     


The spotlight of CITIC Pacific's (0267) meltdown fell yesterday onto the chairman's daughter, who headed the company's finance department when unauthorized foreign exchange deals were made. Frances Yung Ming-fong, the 36-year-old daughter of chairman Larry Yung Chi-kin, has been removed from the finance department and demoted with a salary cut, along with another colleague, CITIC managing director Henry Fan Hung-ling confirmed to The Standard.

On Monday, two senior executives - group finance director Leslie Chang Li- hsien and financial controller Chau Chi- yin - resigned in disgrace after it was revealed the company was forced to make provisions of HK$15.5 billion for the unauthorized forex deals.

Fan defended the firm's decision not to sack Frances Yung by saying she held a "more junior" position and that the report of auditor PricewaterhouseCoopers suggested the two former finance chiefs were far more culpable. "[Yung] has received her punishment," Fan said, insisting that Chang and Chau were not made scapegoats because Chang was the direct boss and Yung was not a board member.

With investor confidence in CITIC Pacific's lack of corporate governance further shaken, its shares plunged 55 percent yesterday to an 18-year low, closing at HK$6.52. That plunge meant it lost HK$17 billion _ more than half the company's market value _ in value in one day.

Frances Yung's name only came to light yesterday after independent market commentator David Webb pointed out her title of director, group finance. ``The daughter certainly knows what's going on, Webb said, adding CITIC Pacific's corporate governance policy was defective.

Webb further accused the stricken property-to-steel conglomerate of ``disregarding its need and obligation to inform investors of price-sensitive information.'' He added: ``It shouldn't take six weeks to disclose that it had a huge exposure to exotic foreign exchange forward contracts.''

A fund manager at SG Asset Management said this episode has sparked market concerns about corporate governance among big firms. ``With market sentiment already weak, the CITIC saga will possibly cause large redemptions of big funds and increase market volatility in the future,'' the fund manager said.

Another fund manager said: ``The company is finished. We will never buy its shares again.''

katherine.ng@singtaonewscorp.com