A quartet of outside law firms and accountants will help probe how banks ended up taking control of more than $2 billion at a key China Evergrande Group subsidiary, the Wall Street Journal reported. Last week, the highly indebted Chinese real-estate developer and its Evergrande Property Services Group Ltd. unit said lenders had enforced their rights over 13.4 billion yuan, or about $2.1 billion, of bank deposits pledged by the subsidiary to guarantee third-party borrowing.
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As millions of people in Shanghai line up for coronavirus tests, authorities are promising tax refunds for shopkeepers in the closed-down metropolis and to keep the world's busiest port functioning to limit disruption to industry and trade, the Associated Press reported. This week's shutdown of most activity in China's most populous city to contain virus outbreaks jolted global financial markets that already were on edge about Russia's war on Ukraine, higher U.S. interest rates and a Chinese economic slowdown.
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Auditors have resigned from a series of Chinese property companies, reflecting the challenges of verifying these businesses’ financial health after a punishing sector-wide downturn, the Wall Street Journal reported. Audit firms are probably taking a hard look at the developers’ results after a series of revelations about off-balance-sheet debts, analysts and investors say. Pandemic-related restrictions in mainland China and Hong Kong have also made it harder to collect information.
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Chinese stocks fell as a lockdown in Shanghai to combat a virus flareup raised worries over disruptions to business operations and the toll on economic growth, Bloomberg News reported. The CSI 300 Index declined by as much as 2% early Monday before trimming losses, as the city said it will lock down in two phases to conduct a mass testing blitz. Consumer stocks led losses across China and Hong Kong markets, with baijiu maker Kweichow Moutai Co and sportswear makers Li Ning Co. and Anta Sports Products Ltd. weighing heavily on benchmark gauges.
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CIFI Holdings Group Co. shares plunged 8.8% as 2021 profit dropped and the builder’s gross margin missed analysts’ estimates, Bloomberg News reported. Other developers including China Evergrande Group have already warned they will probably miss deadlines this month for reporting audited results. S&P Global Ratings withdrew its long-term issuer credit score on Sunac China Holdings Ltd. at the company’s request, while Fitch also downgraded the builder.
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China Evergrande Group said on Tuesday that it was working to raise fresh funds after it disclosed that banks had taken control of more than $2 billion held by one of its key subsidiaries, the Wall Street Journal reported. The surprise announcement comes two months after Evergrande first kicked off restructuring talks with creditors, who had previously threatened to sue the company for failing to disclose adequate information to them after the company defaulted on its offshore debts in December.
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China’s economy got off to a racing start this year as factories churned out more goods and consumers dug deeper into their wallets, the Wall Street Journal reported. But while industrial output and retail spending in the first two months both blew past analysts’ expectations, a rapidly spreading COVID-19 outbreak and the impact of war in Ukraine threaten an early end to the party, and throw into doubt China’s economic-growth target of around 5.5%.
With total exposure of Rs 13,483 crore in insolvent Reliance Infratel, China Development Bank, Export-Import Bank of China, and SC Lowy Asset Management have appealed to the Indian government to speed up the company’s debt resolution procedure, which began in May 2018, Inventiva reported. The lenders voiced their worry in a letter to the Indian finance minister and the Insolvency and Bankruptcy Board of India (IBBI) that despite the strict time frames set forth under the Insolvency and Bankruptcy Code, Reliance Infratel’s debt resolution is still far from complete.
China lacks the rule of law, but that doesn’t stop Chinese companies from taking advantage of the U.S. legal system, according to a commentary in the Wall Street Journal. A California bankruptcy court judge last week approved a settlement agreement between the state-owned Aviation Industry Corp. of China, or AVIC, its subsidiaries and two American entities and their co-claimants. After years of litigation and under some duress, the Americans agreed to walk away with less than a third of the more than $85 million they were owed under an arbitrator’s judgment.
Four financial institutions, including two Chinese banks, have written to finance minister Nirmala Sitharaman and the Insolvency and Bankruptcy Board of India (IBBI) seeking their intervention to speed up the resolution process of Reliance Infratel (RITL), the tower arm of Reliance Communications, the Financial Express reported. China Development Bank, Export Import Bank of China, Shubh Holdings Pte and SC Lowy Asset Management are the signatories to the letter.