Caixin
Sep 06, 2022 08:59 PM
BUSINESS

$1.2 Billion Sucked Out of BMW’s Chinese Partner Through ‘Ghost’ Transactions

A Brilliance Auto vehicle on display at the firm’s booth at an automobile exhibition in Shanghai on Sept. 28, 2018. Photo: VCG
A Brilliance Auto vehicle on display at the firm’s booth at an automobile exhibition in Shanghai on Sept. 28, 2018. Photo: VCG

BMW AG’s joint venture partner Brilliance China Automotive Holdings Ltd. lost 8.3 billion yuan ($1.2 billion) in funds embezzled using illegal “ghost” transaction schemes that involved its parent company and several banks, according to an outside investigation commissioned by the Chinese carmaker.

The investigation found executives at Huachen Automotive Group Holdings Co. Ltd., also known as Brilliance Auto Group, bypassed the board of its Hong Kong-listed subsidiary, and used the firm as a piggy bank to plug holes in its balance sheet, skirting rules and damaging investors’ interests.

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