June 8, 2018 / 3:46 AM / a year ago

China Huarong to refocus on bad loans amid probes into chairman, investment

FILE PHOTO: Logos of China Huarong Asset Management Co are seen during a finance expo in Beijing, in this October 30, 2014 file photo Picture taken October 30, 2014. REUTERS/China Daily

BEIJING/SHANGHAI (Reuters) - China Huarong Asset Management Co Ltd (2799.HK) will focus on its core bad debt business, the company said, amid investigations by the official anti-corruption watchdog of its chairman, Lai Xiaomin, and a company it had invested in.

Huarong is one of China’s largest state-owned bad debt managers. In April, the anti-corruption agency said it was looking into suspected “serious discipline violations” by its chairman, and the company had also taken a stake into a unit of an energy firm whose chairman is also being probed for suspected economic crimes.

“Serious discipline violations” is a government euphemism for graft.

In a statement issued on Thursday, Huarong said it was returning to its main business of non-performing loans and would only focus on that area.

“We must adhere to compliance management and effectively prevent and resolve various risks,” the statement said, adding that improving compliance across the board was also a priority.

Huarong had built up a 36 percent stake in a key unit of embattled private energy company CEFC China Energy. The unit, CEFC Hainan International, is acquiring a $9.1 billion stake in Russia’s oil major Rosneft (ROSN.MM).

Reporting by Shu Zhang in Beijing and Engen Tham in Shanghai; Editing by Miral Fahmy

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