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CITIC Limited

From Wikipedia, the free encyclopedia

For the parent company, see CITIC Group.
CITIC Limited
Native name
中國中信股份有限公司
FormerlyCITIC Pacific
Company type
IndustryConglomerate
Founded1990; 34 years ago (1990) in the British Hong Kong
HeadquartersCITIC Tower, Hong Kong Island,
Hong Kong
Area served
China
Key people
  • Chang Zhenming (Chairman)
  • Wang Jiong (Vice-chairman)
  • Li Qingping (Executive Director)
  • Pu Jian (Executive Director)
RevenueIncrease HK$416.8 billion (2015)
Increase HK$89.5 billion (2015)
Increase HK$41.8 billion (2015)
Total assetsIncrease HK$6,803.3 billion (2015)
Total equityIncrease HK479.1 billion (2015)
Owner
Number of employees
287,910 Edit this on Wikidata
ParentCITIC Group
Websitewww.citic.com Edit this at Wikidata
Footnotes / references
in a consolidated basis (equity and profit excluding perpetual and minority interests)[1]

CITIC Limited (Chinese: 中國中信股份有限公司) is a conglomerate headquartered in Hong Kong. Its shares are listed on the Main Board of the Hong Kong Stock Exchange, and it is a constituent of the Hang Seng Index. 58% of its issued shares are owned by the Chinese state-owned CITIC Group.[2]

It is principally engaged in financial services, resources and energy, manufacturing, engineering contracting, real estate and other businesses.

History

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2008 Foreign exchange losses controversy

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In October 2008, the chairman Larry Yung disclosed that the firm lost HK$15 billion (US$2 billion) due to "unauthorized trades".[3] The unauthorised trades were hedges with a contract value of A$9 billion against the Australian dollar, taken out to cover against a A$1.6 billion prospective acquisition and capital expenditure. Losses were incurred on the contracts when the currency declined from 98.5% against the US dollar to less than 70%.[4] Its parent company, CITIC Group pledged its support to this subsidiary.[3]

The board became aware of this on 7 September 2008, and disclosure was made to the financial markets after trading in its shares was suspended on 20 October. The company and the Hong Kong Securities and Futures Commission faced questions by legislators about the severe delays in their disclosure,[5] considering the company made a[6] pursuant to a proposed acquisition, that as at 9 September 2008, "the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2007".[5] When the shares resumed trading, the share price had fallen by some 75% since the previous close.[7]

As a result of the revelations, two officers were forced to resign in disgrace.[8][9] Due to her involvement in the loss, the chairman's daughter was demoted. The chairman claimed his daughter Frances Yung had not informed him about the situation before its discovery.[3] Managing director Henry Fan temporarily stepped down from the Executive Council and the chairmanship of the Mandatory Provident Fund Schemes Authority, and all other major public positions he held with effect 24 October 2008.[10]

On 3 April 2009, trading in CITIC Pacific shares was once again suspended,[11] and the Hong Kong Police searched the company's office as part of an investigation into whether the company directors had made false statements about the foreign-exchange contracts, as well as company announcements made between July 2007 and March 2009, or had conspired to defraud.[7] On 8 April, chairman Larry Yung resigned, citing the effect of the Commercial Crimes Bureau's visit to the company on public opinion; managing director Henry Fan resigned at the same time. They were replaced by Chang Zhenming, the Chairman of the CITIC Group.[12]

Recent history

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CITIC Pacific bought most of the assets from the parent company and issued new shares to the parent, making most of the assets of CITIC Group were listed in a stock exchange. However, CITIC Group still retained the stake in CITIC Guoan Group.

In 2014 the name of the company was also changed from CITIC Pacific Limited (Chinese: 中信泰富有限公司) to just CITIC Limited (Chinese: 中國中信股份有限公司).[13]

On 20 January 2015, the Japanese general trading company Itochu and its Thai cross-shareholding affiliate Charoen Pokphand announced an investment of approx. HK$80 billion (US$10.4 billion) in CITIC Limited, the largest investment ever made by a Japanese general trading company.[14] The transaction is also the largest acquisition in China by a Japanese company, and the largest investment by foreigners in a Chinese state-owned enterprise.[15]

The deal saw Chia Tai Bright Investment, a 50–50 joint venture of Itochu and Charoen Pokphand, acquire a 10% stake of CITIC Limited from CITIC Group for HK$34.4 billion (US$4.54 billion), as well as subscribing new convertible preferred shares for HK$45.9 billion (US$5.9 billion).[16] Before the deal, CITIC Group owned 77.90% stake, with National Social Security Fund owned an additional 5.00%, making only 17.1% shares of CITIC Limited were free float at 31 December 2014.[13] The company also had HK$13.834 billion perpetual capital securities at 31 December 2014.[13]

On 9 January 2017 the consortium of CITIC Limited, private equity funds of CITIC Capital and Carlyle, bought 80% stake of the franchise rights of McDonald's in Hong Kong and mainland China, for a total consideration of up to US$2.08 billion. CITIC Limited and CITIC Capital would own 52% stake collectively (via an intermediate holding, Fast Food Holdings in a 61.54–38.46 ratio, indirectly owned 32% and 20% stake respectively), while Carlyle would own 28% separately. 20% stake would be retained by McDonald's via Golden Arches Investments Limited (the trading name of McDonald's Hong Kong).[17] In January 2020, CITIC invited other investors to buy most of their stake in the aforementioned Fast Food Holdings.[18][19]

Subsidiaries

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Equity investments

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References

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  1. ^ "2015 Annual Report" (PDF). CITIC Limited. archive of Hong Kong Stock Exchange. 15 April 2016. Retrieved 20 October 2016.
  2. ^ "CITIC (00267.HK) – Corporate Information". aastocks.com. Retrieved 10 February 2019.
  3. ^ a b c Carol Chan (22 October 2008) "Daughter demoted", Pg A1, South China Morning Post
  4. ^ Maria Chan (22 October 2008) "Company exposed itself to high levels of risk", Pg A3, South China Morning Post
  5. ^ a b Dennis Eng & Fanny Fung (22 October 2008) "SFC urged to launch Citic Pacific probe", Pg A3, South China Morning Post
  6. ^ CITIC Pacific (16 September 2008) "DISCLOSEABLE AND CONNECTED TRANSACTION", HK Ex
  7. ^ a b Jonathan Cheng & Carlos Tejada (6 April 2009), Citic Pacific Raided Over Currency Bets, The Wall Street Journal
  8. ^ Associated Press (21 October 2008) HK's Citic Pacific faces US$2B loss on forex bets[permanent dead link], International Business Times
  9. ^ "CITIC Pacific warns potential $2 billion forex losses" Reuters (20 October 2008)
  10. ^ Nickkita Lau (29 October 2008) Under-pressure Fan steps further out of public eye Archived 3 February 2009 at the Wayback Machine, The Standard
  11. ^ Mandy Lo (6 April 2009), Possible CITIC reshuffle may hit share price Archived 9 September 2009 at the Wayback Machine, The Standard
  12. ^ CITIC Pacific chairman resigns in management reshuffle, Xinhua, 8 April 2009
  13. ^ a b c 2014 Annual Report (PDF) (Report). CITIC Limited. 17 April 2015. Retrieved 20 October 2016 – via Hong Kong Exchanges and Clearing Limited website.
  14. ^ "Itochu, CP to jointly invest 1 trillion yen in China's Citic Group". Nikkei Asian Review. 20 January 2015. Retrieved 22 January 2015.
  15. ^ Fukase, Atsuko (20 January 2015). "Thaw in Japan-China Business Ties? Itochu's Citic Deal Towers Above Others". "Japan Real Time" blog. The Wall Street Journal. Retrieved 22 January 2015.
  16. ^ "CITIC Limited Receives Investment from Charoen Pokphand Group and ITOCHU" (PDF). Itochu, Charoen Pokphand and CITIC Group. 20 January 2015. Retrieved 20 October 2016.
  17. ^ "VOLUNTARY ANNOUNCEMENT: ACQUISITION OF A CONTROLLING INTEREST IN MCDONALD'S MAINLAND CHINA AND HONG KONG BUSINESSES" (PDF) (Press release). CITIC Limited. 9 January 2017. Retrieved 13 January 2017 – via Hong Kong Exchanges and Clearing Limited website.
  18. ^ Hong Jinshan; Chan, Cathy (8 January 2020). "Citic to Sell 22% Stake in McDonald's China for $300 Million". Bloomberg L.P. Retrieved 8 January 2020.
  19. ^ Fast Food Holdings Limited 42.31%股权 (in Chinese (China)). China Beijing Equity Exchange. 8 January 2020. Retrieved 8 January 2020.
[edit]
  • Business data for CITIC Limited:
  • "history of CITIC Pacific Special Steel Holdings". steelonthenet.com. n.d. Retrieved 20 September 2022.
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