China_Huarong

China Huarong Asset Management

China Huarong Asset Management

State-owned asset management company

China Huarong Asset Management Co., Ltd. known as just China Huarong (Chinese: 中国华融) is a majority state-owned financial asset management company in China, with a focus on distressed debt management.[2] It was one of the four asset management companies that the Government of China established in 1999 in response to the 1997 Asian financial crisis.

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History

On November 11, 1999, China Huarong was incorporated in Beijing as China Huarong Asset Management Corporation (Chinese: 中国华融资产管理公司), which was one of the four asset management companies as approved by the State Council of the People's Republic of China. In 2000, China Huarong began acquiring a Non-performing loan of RMB 407,696 million from the Industrial and Commercial Bank of China.[3] The company later became a limited company: China Huarong Asset Management Co., Ltd. (Chinese: 中国华融资产管理股份有限公司) in 2012.[4]

In August 2014, China Huarong introduced seven strategic investors, including Warburg Pincus, CITIC Securities International, Khazanah Nasional, China International Capital Corporation, COFCO Group, Fosun International, and Goldman Sachs while the Ministry of Finance of the People's Republic of China remained the majority controlling shareholder and China Life Insurance Group increased its shareholding.[5][6]

In October 2015, China Huarong raised HK$17.8 billion through an initial public offering (IPO), offering 5.77 billion new shares in Hong Kong.[7]

Trial and execution of Lai Xiaomin

Main article: Lai Xiaomin

In April 2018, the Central Commission for Discipline Inspection, and the National Supervisory Commission launched an investigation into possible "serious violations of discipline and laws" of Lai Xiaomin, the Chairman of China Huarong Asset Management, and the Chinese Communist Party Committee Secretary for Huarong.[8] As Huarong's Party Secretary, he emphasized in 2015 that during the operation of China Huarong Asset Management, the Chinese Communist Party (CCP) committee inside the company should play a central role, and party members should play an exemplary role.[9] On October 15, 2018, Lai Xiaomin was expelled from the CCP. On August 11, 2020, the No. 2 Intermediate People's Court of Tianjin opened a public hearing on the case of bribery, corruption, and bigamy of Lai Xiaomin. The indictment alleges that Lai Xiaomin accepted 1.788 billion yuan in bribes, and illegally occupied public funds 25.13 million Yuan.[10] On 5 January 2021, Lai was found guilty of receiving 1.79 billion yuan ($277.3 million) in bribes and bigamy and was sentenced to death without reprieve for bribery, embezzlement, and bigamy.[11] His private assets were seized as well.[12] The sentence was carried out on 29 January 2021.[13]

2021 Bond selloff and default fears

In April 2021, offshore U.S. dollar bonds issued by China Huarong plunged in value. The selloff came after the company missed an end-March deadline to release its 2020 financial results.[14] Fears of a near-term default were eased after the company was said to have prepared funds for full repayment of S$600 million ($450 million) offshore bonds due April 27.[15] To reduce the risk of market contagion and to stabilize its cash flow, Chinese regulators asked Chinese banks to provide loans to China Huarong.[16]

Subsidiaries

  • Huarong International Financial (SEHK: 993)

Equity investments

Former

References

  1. [1]
    "2015 Annual Report" (PDF). China Huarong. Hong Kong Stock Exchange. 28 April 2016. Retrieved 5 November 2016.
  2. [2]
    Reuters Editorial. "2799.HK - China Huarong Asset Management Co Ltd Profile | Reuters". Reuters. Retrieved 2021-06-08. {{cite web}}: |author= has generic name (help)
  3. [3]
    "Public asset management companies in East Asia - Case study" (PDF).
  4. [4]
    "中国东方资产管理股份有限公司成立-中新网".
  5. [5]
    "Milestones_CHAMC". www.chamc.com.cn. Archived from the original on 25 November 2015. Retrieved 22 May 2022.
  6. [6]
    http://www.hkexnews.hk/listedco/listconews/SEHK/2015/1030/a5602/ECHINAHUARONG-20150702-06.PDF [bare URL PDF]
  7. [7]
    "China Huarong raises $2.3bln in Hong Kong IPO-IFR". Reuters. Archived from the original on 2016-03-15.
  8. [8]
    "《赖小民案涉案财物近17亿元已追缴》". Xinhua Net. Archived from the original on 2020-08-27. Retrieved 2020-08-26.
  9. [9]
    "《中国华融党委书记、董事长赖小民赴广东分公司调研 强调全系统要总结、学习、推广"广东经验"助推中国华融转型发展》". Archived from the original on 2020-08-27. Retrieved 2020-08-26.
  10. [10]
    "《赖小民案涉案财物近17亿元已追缴》". Xinhua Net. Archived from the original on 2020-08-27. Retrieved 2020-08-26.
  11. [11]
    "Why China Is Sentencing a Tycoon to Death". Yahoo Finance. 5 January 2021. Retrieved 17 April 2021.
  12. [12]
    "Lai Xiaomin, ex-chair of China Huarong Asset Management, gets death for graft". The Standard. 5 January 2021. Retrieved 17 April 2021.
  13. [13]
    "China executes ex-banker Lai Xiaomin in corruption, bigamy case". France 24. 29 January 2021. Retrieved 17 April 2021.
  14. [14]
    Ping, Chong Koh; Yu, Xie (15 April 2021). "Chinese Asset Manager Suffers Bond Selloff After Delaying Results". Wall Street Journal. Retrieved 17 April 2021.
  15. [15]
    "China's Very Bad Bank: Inside the Huarong Debt Debacle". Bloomberg News. 14 April 2021. Retrieved 17 April 2021.
  16. [16]
    "China asks banks not to withhold loans to asset manager Huarong". Reuters. 16 April 2021. Retrieved 17 April 2021.
  17. [17]
    "2016 Annual Report" (PDF). Fullshare Holdings. 20 April 2017. pp. 102–103. Retrieved 29 July 2017. Reference is made to the disclosure of interest forms dated 21 December 2016 of Superb Colour, published on the Stock Exchange's website. Superb Colour is interested in 1,948,613,450 Shares. Superb Colour is a wholly owned subsidiary of China Huarong International, which in turn is owned as to 88.1% by Huarong Real Estate. Huarong Real Estate is a wholly owned subsidiary of China Huarong Asset, a State-owned entity, which in turn is owned as to 63.36% by the MFC. As such, each of China Huarong International, Huarong Real Estate, China Huarong Asset and the MFC is deemed to be interested in the said Shares under the SFO.
  18. [18]
    "Stock.us".
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