Hong Kong’s Department of Justice has called for a police investigation into a Hainan land auction involving Citic Pacific (0267.HK) and the company’s former chairman Larry Yung Chi-kin, the South China Morning Post reported. Shareholders have complained that Yung successfully bid for land in Hainan’s Wanning city at below market value which Citic Pacific should have bought. Reports indicate that Yung paid less than 12% of the market price for a 540,000 square meter site in the seaside resort just two weeks after he resigned from the company. Legislator James To Kun-sun said he had reported the complaints about the auction to the Securities and Futures Commission and that the SFC should investigate whether it was a related-party transaction that the company should have disclosed in its 2009 annual report. "This is a prima facie case for the SFC to investigate," To said. Citic Pacific is separately being investigated for an unauthorized foreign currency trades.
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