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The Citic Pacific iron ore mine in Karratha, Western Australia is shown on Aug. 20, 2012. The original $2.47-billion (U.S.) budget for the massive open-cut mine and processing complex has soared to $8-billion and is more than two years behind schedule. A 4,000-strong work force is now racing to bring the mine into production.STAFF/Reuters

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Disgraced former CITIC Pacific chairman Larry Yung Chi-kin, is shown in a March 25, 2009 file photo. Mr. Yung, 70, emerged from obscurity after the Cultural Revolution to become the first tycoon among China’s ‘princelings,’ the children and grandchildren of the party elite.BOBBY YIP/Reuters

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Mr. Yung's father, former Chinese vice-president Rong Yiren, left, shakes hands with Paul Desmarais, chairman of Montreal-based Power Corp., as former Prime Minister Brian Mulroney looks on in Beijing, Oct. 6, 1993. Mr. Rong, who co-operated with Communist efforts to build a socialist economy, was estimated to be one of the 10 richest men in post-World War II China.WANG JINGDE

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Chinese leaders and people attend a memorial for former vice-president and “red capitalist” Rong Yiren at the Babaoshan Revolutionary Cemetery in Beijing on Nov. 3, 2005. Mr. Rong was ‘rehabilitated’ after the Cultural Revolution and his only son, Larry Yung, lived an extravagant lifestyle.CHINA DAILY/Reuters

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A man walks past a poster depicting the Chinese Cultural Revolution at a film studio on the outskirts of Yinchuan in this file photo. As a young man, Mr. Yung was forced to spend six years labouring in Sichuan Province, but after his father returned to influence, he created CITIC Pacific, one of the first ‘red chips’ – mainland-controlled companies with shares traded in Hong Kong.JASON LEE/Reuters

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Punters wave to a horse at Shatin race track in Hong Kong in this file photo. Like other tycoons in gambling-mad Hong Kong, Mr. Yung invested in champion thoroughbreds and was elected a steward of the prestigious Hong Kong Jockey Club. He also bought the former Sussex home of late British Prime Minister Harold Macmillan for a reported £5.5-million in 1989.VINCENT YU/The Canadian Press

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Aircraft of Cathay Pacific Airways and Dragonair are parked near each other on the runway in Hong Kong in this file photo. CITIC Pacific became a major shareholder of Cathay Pacific at the same time that it was gobbling up other investments in aviation, property, telecoms, tunnels, bridges, power plants and mainland steel mills.ANAT GIVON/The Associated Press

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In 2006, after Mr. Yung had visited Australia to explore potential investments, CITIC Pacific bought the right to mine up to six billion tonnes from the Pilbara deposit from Australian mining entrepreneur Clive Palmer. Once considered a coup for the Chinese firm, the Citic Pacific iron ore mine (shown here) has been called a potential ‘company killer.’STAFF/Reuters

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Labourers work at a coking plant of a steel factory in Hefei, Anhui province Aug. 25, 2012. China’s steel mills defaulted on supply contracts or deferred shipment of up to 4 million tonnes of iron ore in August, the latest evidence that a slowdown in the China’s economy is hurting the world’s top steel market.JIANAN YU/Reuters

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Billionaire Clive Palmer poses next to one of his Rolls Royces at his golf resort and spa in Coolum, Queensland, Australia on Aug. 21, 2012. Mr. Palmer, a law school dropout, has based much of his fortune on selling minerals to China.STAFF/Reuters

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A view of the Citic Pacific iron ore mine workers’ camp. Within months of the 2006 deal, it became clear CITIC Pacific had underestimated the costs of establishing Australia’s biggest magnetite mines.STAFF/Reuters

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A bull sculpture stands outside the Exchange Square where the Hong Kong Stock Exchange is located. CITIC Pacific compounded its financial woes with a series of ill-timed leveraged derivative contracts in June and July 2008 to hedge against a rising currency. Police and regulators in Hong Kong have recently concluded their probes into suspected fraud, theft and disclosure failings at CITIC Pacific and prosecutors are now weighing whether to lay charges.BOBBY YIP/Reuters

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