Chinese authorities have fined automaker Audi USD40.5 million and Chrysler USD5.2 million on charges of violating anti-monopoly law in a sweeping probe of the auto industry. The government announced yesterday that Audi’s China unit was found to have violated the law by enforcing minimum prices that dealers were required to charge for sales and service and Chrysler enforced minimum sales prices. Three Chrysler dealerships were fined for agreeing on minimum prices for repairs. Regulators have launched a series of investigations of global automakers, technology suppliers and other companies under China’s 6-year-old anti-monopoly law. Business groups say foreign companies appear to be unfairly targeted but authorities have denied that. Authorities earlier announced fines for a group of Japanese auto components suppliers.
HK regulator sues CITIC ex-chairman, executive directors
Hong Kong regulators said yesterday they are suing state-owned Chinese conglomerate Citic and its former chairman in a bid to compensate investors over a huge loss related to a bungled bet on Australia’s currency.The Securities and Futures Commission said it launched legal proceedings against Citic Ltd. and five former executive directors for allegedly providing false or misleading information about the company’s financial position in 2008. The commission said it was seeking a court order for compensation for up to 4,500 investors. The company, formerly known as Citic Pacific, warned in 2008 it would suffer losses of $2 billion after bets on the Australian dollar and other currencies to hedge costs for an Australian iron-ore operation went sour. Investor anxiety about the company’s situation, magnified by the turmoil of the global financial crisis, sent Citic’s shares plunging and wiped out two-thirds of its market value in four days. The SFC alleges that Citic and the five directors “were aware of huge financial exposure arising from the leveraged foreign exchange contracts” six days before the company released a statement saying it wasn’t aware of any “adverse material change” in its financial or trading position.
Investors bought about 1.9 billion Hong Kong dollars (USD245 million) worth of stock during the period in question, the SFC said.
Chairman Larry Yung, who is one of those named in the suit, was forced to resign following the fiasco. AP