At first this looked like a fresh rogue trader story out of the Chinese investment group Citic. But nothing about this suggests it was just one guy who managed to slip in some trades under the radar of his higher ups. It appears that a unit of the company, which develops property and steel, went way long the Australian dollar — when it went the wrong direction, it cost them $2 billion.
Telegraph: The loss is four times the £320m squandered by China Aviation Oil by betting on the price of jet fuel in 2004. Accordingly, Citic Pacific’s share price tumbled 55pc on Tuesday, leaving it down 85pc so far this year.
Citic’s 65-year-old chairman, Larry Yung, is travelling to Beijing on Wednesday in order to plead with the government for $1.5bn loan in order to tide the company over and save it from bankruptcy. Mr Yung is China’s fifth-richest person with £2.1bn, according to the most recent rich list.