Around the evening of 20 October 2008, Citic Pacific, the Hong Kong arm from the CITIC Group, China's biggest condition-possessed investment company, stunned the stock marketplaces by announcing it would lose around HK$15.5 billion (roughly US$2 billion). The organization mentioned these deficits were because of foreign currency exposures that it absolutely was conscious of for six days, but had unsuccessful to inform the traders about. Within an apologetic statement towards the public, Ray Yung Chi-kin, the chairman of Citic Pacific, acknowledged the deficits and accepted the contracts was not correctly approved. Traders and experts subsequently assaulted Citic Pacific because of its corporate governance and internal control practices. They expressed shock that the organization will make such dangerous transactions which it might delay the disclosure of those large potential deficits for six days. Exactly what does this incident say about Citic Pacific's internal risk management and it is board of company directors, specially the independent company directors? Has the organization shown effective corporate governance standards and systems through alignment of their top-level managers' choices using the interests from the investors?
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