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China is investigating an executive for grafting into one of the largest state-backed debt managers since six months after the former senior bank official was executed on corruption charges.
Hu Xiaogang, vice chairman of China’s Great Wall Asset Management, is investigating the Central Discipline Inspection Commission, the country’s guardian against corruption, for alleged “serious” violations, according to a document released by the Banking and Insurance Regulations of China. Committee.
The probe is the latest indication of the possible financial behavior that China’s “bad debt” assets may have in the top positions of asset management companies, as concerns are rising above high debt levels and falling earnings.
There have been groups between Huarong Asset Management and China Cinda Asset Management increasing the study while regulators and investors believe Beijing is endangering dangerous elements of the country’s financial system, it believes it threatens economic stability.
In a CBIRC statement, Hu referred to the previous role of vice president of China Orient Asset Management, another major highly indebted investor, meaning that the charges were related to his nearly two-decade tenure in the group, rather than the function he held on the big wall.
Four of China’s worst debt managers emerged after the Asian financial crisis in the late 1990s. They were designed to reduce risk on the country’s largest lenders by removing debts from their books before listing them on the stock market.
But they have become teams a serious problem for Beijing After securing more than $ 100 billion in debt, expanding to sectors beyond their mission and expanding to financial conglomerates.
While Huarong and Cinda appear in Hong Kong, the Great Wall and the East are private. According to S&P data, all four significantly expanded their foreign assets between 2015-17.
Huarong, China’s largest serious debt investor, has debts of about $ 22 billion and is facing intense market pressure due to delays in publishing annual results. The company’s Hong Kong-listed shares were suspended in April, while its bond prices remained volatile.
Lai Xiaomin, 58-year-old former head of Huarong was executed in January after being found guilty of $ 280 million in bribery and other crimes.
Repression is a sign that Chinese President Xi Jinping has been fighting corruption for many years. Experts outside China have seen this campaign as a means of embedding the deeply ingrained government and corporations while threatening potential challenges to the power of the Communist Party Xi.
The debt problems of state-backed unfortunate loan managers have also arisen in the face of growing concern from international investors. default record number and intense growth decreases in valuations Hitting the Chinese financial sector. Chinese companies owe more than $ 100 billion in debt this year.
In the face of this, the Chinese is being studied by the finance ministry the state’s top four debt groups are transferring shares to a new holding company as a way to jeopardize the financial system further, Bloomberg News reported last month, citing unnamed sources.
The Great Wall’s permanent bonds fell slightly on Wednesday to trade at 97.8 cents a dollar.
Additional report by Sherry Fei Ju in Beijing
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