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Chinese fund saves Hong Kong arm

Business Materials 13 November 2008 14:10 (UTC +04:00)

The Chinese state-funded investment company Citic Group has increased its stake in its Hong Kong arm in an effort to cover massive losses, reported bbc.

Citic Pacific, a Hong Kong group with interests from airlines to mining, stands to lose 16.8bn Hong Kong dollars ($2.1bn; £1.4bn) in bad currency bets.

Citic Group has invested HK$11.6bn in its subsidiary and said it would take over some of the currency liabilities.

Citic Pacific is under investigation for delays in reporting its losses.

"We can now move on and begin to put recent unfortunate events behind us", said Citic Pacific's chairman, Larry Yung.

Citic Pacific's shares had been suspended from trading since 31 October, and when trading restarted the shares jumped 17% on news of the deal. However, they later fell back to close up just 2.5%.

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