Among other things he says: “The distressed asset sector is really a dark side of financial market where there are full of thieves and robbers who spent much efforts to make public or state-owned assets into distressed ones.”
Two years ago I met a partner at another Chinese distressed asset fund who told me that his firm never participates in NPL auctions. They preferred to go directly to provincial and municipal authorities to buy NPLs (not all NPLs are held by banks — municipalities and provinces, whose borrowings are guaranteed by the central government, have also made lots of non-collectible loans) because, in his words, there was more “discretion” about pricing. I interpret “discretion” to mean something a little shadier – perhaps fraud or bribery.
I haven’t seen any serious study (and I doubt any exists) but there is a lot of evidence that looting and pillaging are taking place on a massive scale under the guise of resolving non-performing loans. Aside from the social implications, there are also of course banking implications because I suspect a lot of the accumulated wealth inevitable represents transfers from the banks.
After all, as Willy Sutton said, “That’s where the money is.”
Yes I know this happens everywhere, but rarely on this scale, and when I see stories like this they only increase my skepticism about whether or not we should be confident that the financial system is in good shape and most of the skeletons taken out of the closet. These stories involve a lot of people at the center of the corporate and financial worlds. This is from today’s South China Morning Post.
Finance chief replaced amid sex scandal
Finance Minister Jin Renqing has been replaced abruptly after a sex scandal snowballed to implicate several senior mainland officials, sources said. Mr Jin had been shifted to a government think-tank and would be replaced by Xie Xuren , director of the State Administration of Taxation, Reuters reported, citing an announcement by the Communist Party’s Organisation Department.
Its report did not give any specific reasons why Mr Jin, 63, had been transferred to the Development Research Centre. Cheapest generic cialis: but sources said there had been intense speculation about the minister’s career after the mainland leadership said it was stepping up investigation of a corruption case involving Du Shicheng, the former party secretary of Qingdao , a booming coastal city which will host the sailing events of the 2008 Olympic Games.
In December, Mr Du was fired from his government and party posts for “serious breaches of discipline”, the party’s euphemism to describe corruption and moral lapses including keeping mistresses. As the party’s anti-corruption watchdog, the Central Commission for Discipline Inspection, continued its investigation, it also detained a young woman believed to have had an intimate relationship with Mr Du. To the shock of anti-graft officials, the woman, known as a social butterfly, later confessed she had also had intimate relationships with several senior government officials and some of them had abused their power to advance her business dealings.
In June, Chen Tonghai, chairman of oil giant China Petroleum & Chemical Corp (Sinopec), was detained for corruption.Sources said the woman’s confession had prompted anti-graft officials to launch an investigation of Mr Chen but that they focused their investigation on economic irregularities involving Mr Chen but unrelated to the woman’s case; cheapest generic cialis.The woman was also believed to have implicated Mr Jin and several other senior government officials who have important roles advising on foreign and domestic policy; cheapest generic cialis.
The keeping of mistresses and dalliances with young women have been among the main reasons for the recent sackings of senior officials; cheapest generic cialis.State media has reported that the majority of government officials arrested for corruption were accused of keeping young women as mistresses.
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