Beijing has warned it will show “zero tolerance” for financial misconduct after several high-profile bond defaults by state-owned companies roiled the Chinese debt market, reported the Financial Times.
Speaking at a meeting for the committee that oversees China’s financial sector over the weekend, vice premier Liu He said authorities would “severely” crack down on illegal behavior on bond financing, ranging from “malicious” transfer of assets to misuse of funds.
The comments come as one of China’s largest coal companies Yongcheng Coal and Electricity Holding Group this week faces potential defaults on RMB 26.5 billion ($4 billion) worth of bonds after it missed a RMB 1 billion debt payment earlier this month, said the FT.
Regulators have said they are investigating securities companies and banks for possible wrongdoing in connection with Yongcheng Coal’s default. On Sunday the financial development and stability committee, headed by Liu, said there would be “zero tolerance” of any irregularities or misleading disclosures.