Irreverent overseas analysts have dubbed it “Hua-wrong”. But the problems besetting China Huarong Asset Management, the country’s largest distressed debt investor, are deadly serious.
Its former chair Lai Xiaomin was executed for corruption in January, it has been unable to file its financial statements since March, its Hong Kong-listed shares are suspended and some of its perpetual bonds are trading below 65 cents on the dollar.
Huarong insists that it can make payments on its debt and says the delayed accounts will allow it to complete a still mysterious “transaction”. But the company’s woes pose a difficult problem for Beijing’s efforts to reduce risk in its financial markets and stand as a warning to those who have been pouring money indiscriminately into Chinese companies.