Article: China Asks Citic Group to Examine Huarong’s Finances

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China Asks Citic Group to Examine Huarong’s Finances

Charlie Zhu, Zheng Li, Jun Luo, and Heng Xie, 28 June 2021

China has asked one of its biggest state-owned conglomerates to examine the finances of China Huarong Asset Management Co., people familiar with the matter said, adding a new twist to the drama that has roiled the world’s second-largest credit market for months.

Citic Group, whose businesses span everything from banking to securities and mining, recently dispatched a team to Huarong to pore over the embattled distressed-debt manager’s books, the people said, asking not to be identified discussing private information.

It couldn’t immediately be determined what, if anything, might result from Citic Group’s involvement. In 2019 the conglomerate and China Everbright Group were asked to examine the books of troubled regional lender Baoshang Bank Co., one of the people said, but the lender was ultimately taken over by Chinese regulators.

Huarong, Citic Group and the China Banking and Insurance Regulatory Commission didn’t immediately respond to requests for comment.

Citic Group’s emergence as a new player in the Huarong saga comes as the bad-debt manager reaches the final stages of preparing its past-due 2020 financial results. Publication could come within the next few weeks, sooner than a previous internal timeline to announce by the end of August, a person familiar with the matter said.

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