China weighs moving stakes in bad debt managers to sovereign fund -Bloomberg News (updated)

China Cinda Asset Management

19/05/2023 05:38

(Adds details on bad debt managers)
       May 19 (Reuters) - China is considering transferring
government ownership in the country's biggest bad debt managers
to a unit of its sovereign wealth fund, Bloomberg News reported
on Friday.
    Under the proposal, the Ministry of Finance will move its
stakes in China Cinda Asset Management Co  1359.HK , China Great
Wall Asset Management and China Orient Asset Management to
Central Huijin Investment, the report said citing people
familiar with the matter.
    Calls to China Cinda, China Great Wall, China Orient and
Central Huijin Investment for comment were not answered. China
Investment Corp., parent of Huijin, did not immediately reply to
requests for comment sent by email.
        China established the three asset management companies
(AMCs) and China Huarong Asset Management Co in 1999 to help
handle bad loans from the country’s four largest state banks,
which were facing an insolvency crisis. 
  
        But the distressed asset managers expanded beyond their
initial remit, posing risks to the financial system. In a
government-orchestrated bailout in 2021, troubled Huarong saw
Citic Group overtake the finance ministry as its largest
shareholder.
  

 (Reporting by Shivani Tanna in Bengaluru and Ziyi Tang in
Beijing; Editing by Jacqueline Wong and Kim Coghill)
 ((ShivaniJayesh.Tanna@thomsonreuters.com;))