Huarong Asset Management Shares Suspended in Hong Kong Trading
What’s new: Trading in China Huarong Asset Management Co. Ltd. shares was suspended in Hong Kong Thursday over delays in publishing annual results.
The state-owned bad debt manager was one of about 50 Hong Kong-listed companies suspended from trading after they failed to report earnings by the March 31 deadline.
In a brief online communication with investors, interim Huarong President Wang Wenjie said auditors need more time to review the 2020 results as certain relevant transactions are still to be determined. The company also hasn’t disclosed unaudited 2020 results. Wang said unaudited results may not accurately reflect the company’s financial performance and may cause confusion and mislead investors.
Caixin learned that Huarong and regulatory authorities proposed financial restructuring plans to major shareholders. The “relevant transactions” mentioned in the company’s statement might refer to the restructuring plans, Caixin learned.
Wang didn’t disclose when Huarong plans to publish its results and said its main business is operating normally.
The background: Former Huarong Chairman Lai Xiaomin was executed in January. He was convicted of taking a record 1.79 billion yuan ($276.8 million) of bribes — including 104 million yuan of bribes that ultimately failed to take place — from 2008 to 2018 in exchange for his help in financing, promotions and more. He was also convicted of bigamy and colluding with others to embezzle 25.1 million yuan of public funds.
Established in 1999, Huarong is one of four national asset management companies created to dispose of massive volumes of nonperforming assets held by China’s big state banks.
During his five-year-plus tenure as Huarong’s chairman, Lai oversaw an aggressive expansion that transformed the company into one of the biggest players in China’s financial sector but also left the company with hundreds of billions of yuan of unresolved bad debt.
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