Watchdog probes Citic Pacific board

The board of Citic Pacific, which is developing a $6 billion iron ore project in the state, is reportedly under investigation by Hong Kong securities regulators over a trading scandal.

AFP reported that the country's Securities and Futures Commission is probing irregularities in the company's foreign exchange trades, which was first revealed by Citic in October last year.

At the time the company said that the unauthorised foreign exchange trades, primarily on the Australian dollar, could cost it some $HK15.5 billion ($A2.8 billion).

However Citic revised the figure to $HK18.6 billion ($A3.4 billion) last month.

The losses were caused by a falling Australian dollar which fell from a high of some US98 cents to its last traded price of US72.06c at noon today.

Citic has previously come under fire for not disclosing the losses until some six weeks after executives said they became aware of them.

The company has previously said the trading saga will not affect its Sino iron ore project which is currently under construction.