May 29, 2014 05:43 PM

Investor Complaints Have Regulator Eyeing Tanking Tanker Corp.

(Beijing) — The exposure of a massive amount of off-balance-sheet debts at Nanjing Tanker Corp., a state-backed crude carrier on the verge of delisting, has rung alarm bells for both regulators of state assets and investors.

A bank has also taken action, asking a court to freeze assets because the company has failed to repay nearly US$ 90 million.

Research jointly conducted by Caixin and the British shipping industry journal Lloyd's List found that from 2005 to 2008, Nanjing Tanker, a subsidiary of Sinotrans & CSC Holdings Co., secured US$ 1.28 billion in loans from 19 banks in 11 countries through off-balance-sheet financial arrangements to fund its fleet expansion during a shipping industry boom. Commitment to the borrowing, which financed 10 very large crude carriers (VLCCs) and 10 medium-range tankers, is one of the major reasons the company faces insolvency. However, this has never been properly disclosed by the company.

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