Chinese coffee chain Luckin Coffee said yesterday that its board had found no evidence of misconduct by Chief Executive Jinyi Guo during a month-long investigation into allegations made by some employees, Reuters reported. Guo, who took over after the competitor to Starbucks ousted co-founder and chairman Charles Zhengyao amid an internal fraud investigation, had denied the allegations. The coffee chain’s explosive growth was halted last year by an investigation into its accounts for overstating 2019 revenue and understating net loss.
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When China’s leader Xi Jinping late last year quashed Ant Group’s initial public offering, his motives appeared clear: He was worried that Ant was adding risk to the financial system, and furious at its founder, Jack Ma, for criticizing his signature campaign to strengthen financial oversight, the Wall Street Journal reported. There was another key reason, according to more than a dozen Chinese officials and government advisers: growing unease in Beijing over Ant’s complex ownership structure—and the people who stood to gain most from what would have been the world’s largest IPO.
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Pakistan plans to ask China for relief on payments for power projects Beijing financed over the past eight years, the latest developing nation that’s struggling to repay debt under President Xi Jinping’s Belt and Road Initiative, Bloomberg News reported. In informal talks, Pakistan and China have discussed easing terms on the repayment of debt on about a dozen power plants. The parties have canvassed Beijing’s willingness to stagger debt payments, as opposed to lowering equity returns.
Some of the world’s biggest investors were on the cusp of a multibillion-dollar windfall from their bets on Ant Group Co. Now they are stuck with shares that won’t pay off soon, the Wall Street Journal reported. In 2018, an exclusive group of global private-equity firms and mutual-fund managers including Silver Lake, Warburg Pincus LLC, Carlyle Group Inc. and T. Rowe Price Group Inc. took part in a coveted fundraising by Ant that raised $14 billion and minted the financial-technology giant as the world’s most valuable startup.
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Pressure is mounting on companies whose behavior could pose a risk to China’s financial system. HNA Group, the vast Chinese conglomerate that threw tens of billions of dollars at trophy businesses around the world, is nearing the biggest corporate collapse in recent Chinese history, offering a glimpse of how Beijing treats its most powerful entrepreneurs, the New York Times reported. HNA’s insolvency is the largest China has seen since the country first began using its bankruptcy law in 2007, according to Michelle Luo, a bankruptcy lawyer at Hui Ye law firm.
Embattled Chinese coffee chain Luckin Coffee Inc. filed for chapter 15 bankruptcy in New York, less than a year after the company said that more than a quarter’s worth of business may have been faked, Bloomberg News reported. The move will protect the company from lawsuits by U.S. creditors while it reorganizes in China, where it runs several thousand outlets. All its coffee shops will remain open for business and the chapter 15 petition will not materially impact the company’s day-to-day operations, according to a statement issued today.
China’s army of tiny hedge funds are pulling further ahead of their better-known foreign competitors with outsized gains helping them attract more assets, Bloomberg News reported. The nearly 15,000 funds offered by Chinese managers returned 30% on average last year, with the best-performers surging 10-fold, according to Shenzhen PaiPaiWang Investment & Management Co. That dwarfs the average 12% gain for hedge funds globally.
U.S. Secretary of State Antony Blinken has called for China to condemn the military coup in Myanmar and warned Beijing that Washington will work with its allies to hold the People’s Republic accountable for what he described as its efforts to threaten international stability particularly in the Taiwan Strait, CNBC.com reported. Blinken spoke with his counterpart Foreign Minister Yang Jiechi late Friday in the first conversation between senior U.S. and Chinese officials since President Joe Biden took office. The top U.S.
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China will improve policies to help medium-to small and micro companies deal with bankruptcy more smoothly, state broadcaster reported on Wednesday, citing the state council meeting, Reuters reported. China will also crack down on such firms dodging repayment obligations for defaulted bonds in order to protect the interests of workers, creditors and investors, the cabinet said.
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Ant Group Co. has agreed a restructuring plan with Chinese regulators under which the fintech giant will become a financial holding company, potentially easing founder Jack Ma’s regulatory woes, Reuters reported. The plan calls for putting all of Ant’s businesses into the holding company, including its payment processing and technology offerings in areas like blockchain and food delivery, the person said, declining to be named due to confidentiality constraints.
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