CITIC Group explained

CITIC Group Corporation Ltd.
Native Name:中国中信集团有限公司
Native Name Lang:ZH
Type:State-owned enterprise
Industry:Conglomerate
Founder:Rong Yiren
Key People:Chang Zhenming (Chairman), Jiong Wang (Vice Chairman, President, Member of Executive Committee and Member of Nomination Committee), Jianzhong Dou (Executive Director and Member of Executive Committee), Wei Min Ju (Chief Financial Officer)
Products:Metals
Oil & gas
Construction
Food
Services:Financial services
Investments
Parent:Ministry of Finance
Subsid:CITIC Limited
Footnotes:in a consolidated basis; equity and profit excluded minority interests; in Chinese Accounting Standards[1]
Location City:Beijing
Location Country:China
Module:
Child:yes
S:中国中信集团有限公司
T:中國中信集團有限公司
P:Zhōngguó zhōngxìn jítuán yǒuxiàn gōngsī
Order:st
Also Known As:CITIC Group
S2:中信集团
T2:中信集團
P2:zhōngxìn jítuán

CITIC Group Corporation Ltd., formerly the China International Trust Investment Corporation (CITIC), is a state-owned investment company of the People's Republic of China, established by Rong Yiren in 1979 with the approval of Deng Xiaoping.[2] Its headquarters are in Chaoyang District, Beijing.[3] it is China's biggest state-run conglomerate[4] with one of the largest pools of foreign assets in the world.[5] In 2023, the company was ranked 71st in the Forbes Global 2000.[6]

Businesses

Its initial aim was to "attract and utilize foreign capital, introduce advanced technologies, and adopt advanced and scientific international practice in operation and management."[7] It now owns 44 subsidiaries including China CITIC Bank, CITIC Limited, CITIC Trust and CITIC Merchant (mainly banks) in Mainland China, Hong Kong, the United States, Canada, Australia and New Zealand.

History

CITIC Group was founded as the China International Trust Investment Corporation (; abb. CITIC), a Chinese state-owned enterprise in 1979. In the 1980s, Chinese government founded many for profit corporations, which CITIC was under the leadership of Rong Yiren, a former businessman and politician at that time, who chose to stay in the mainland China in the 1950s after his family business was nationalized. His son, Larry Yung,[8] was the former chairman of CITIC Group's listed subsidiary CITIC Pacific. Larry also led the Hong Kong office and parent company of CITIC Pacific since 1986; Larry became a Hong Kong-based businessman since 1978. Throughout the 1980s, Xiong Xianghui served as CITIC vice chair and significant CITIC leadership was drawn from the Intelligence Bureau of the Joint Staff Department.[9]

CITIC Group headquarters was based in Beijing; Hong Kong office was formally opened in 1985. The Mainland-based CITIC Bank was founded by the group in 1984.[10] The group also acquired 12.5% stake of the Hong Kong flag carrier Cathay Pacific in 1987,[10] and became a member of a shareholders' agreement in 2006;[11] the stake was sold to fellow state-owned company Air China in 2009.[12] The group also acquired Hong Kong-based Ka Wah Bank in 1986.[10] In 1990, the group also absorbed some of the subsidiaries of another state-owned company, .[13] Other notable acquisitions included 38.3% stake of another airline Dragonair, 20% stake of Hong Kong Telecom, etc.[10]

CITIC also acquired a Hong Kong listed company and renamed to CITIC Pacific in the 1990s.

2000s

See main article: CITIC Limited. Beginning in 2008, CITIC Group had the lead role in developing Quilamba in Angola as part of an exchange of Chinese construction materials and expertise for Angolan natural resources.[14]

Its subsidiary, CITIC Pacific (now known as CITIC Limited), made unauthorized bets on the foreign currency market in October 2008 and lost HK$14.7 billion (US$1.9 billion, when accounted for in mark-to-market terms). Senior executives such as Financial Controller Chau Chi-Yin and Group Finance Director Leslie Chang resigned.[15] [16] [17] Its stock price plunged 55.1 percent upon the resumption of trade.[18]

In 2015, CITIC Group sold 10% stake of CITIC Limited to a joint-venture of Itochu and Charoen Pokphand for HK$34.4 billion (US$4.54 billion); the joint venture also subscribed new convertible preferred shares for HK$45.9 billion (or US$5.9 billion).[19] It was reported it was the largest investment ever made by a Japanese general trading company.[20] The transaction is also the largest acquisition in China by a Japanese company, and the largest investment by foreigners in a Chinese state-owned enterprise.[21]

In 2023, China Huarong Asset Management, the company that manages the troubled assets, contracted to buy 5.01 percent of Citic Limited for HK$13.6 billion (US$1.7 billion). Huarong will acquire a stake from CITIC Group’s subsidiary, Citic Polaris. In addition, Huarong plans to change the name to China Citic Financial Asset Management. The deal is a return on the investment that CITIC invested in 2021, leading the rescue of Huarong.[22] [23]

CITIC CEFC bond default

In November 2016, CITIC CLSA acted as the sole bookrunner for CEFC Shanghai's US$250 bond issuance. CITIC CLSA hid from the market that the bond deal was only 60% subscribed at pricing. It manipulated the bond price in the secondary market in an effort to offload the 100mm USD bond CITIC CLSA held on its balance sheet.[24]

In May 2018, CITIC Group announced they would repay ca 450 million euros owed by CEFC Europe to finance and banking group J&T within days but since the debt was not paid a week later, J&T announced it had taken over shareholder rights and installed crisis management at CEFC Europe.[25] [26] Several days later, CEFC Shanghai defaulted on $327 million in bond payments, and offered to make the payments six months after the maturity date.[27]

In October 2020, some retail CEFC bondholders in Hong Kong filed a complaint to the Securities and Futures Commission in Hong Kong against the bond's sole underwriter CITIC CLSA.[24]

Group companies

Equity investments

See also

Notes and References

  1. Web site: 2013 Annual Report. 2014. 24 November 2016. CITIC Group. RAR. 25 November 2016. https://web.archive.org/web/20161125043135/http://www.citicgroup.com.cn/iwcm/UserFiles/2013/2013-07/AnnualReport2013.rar. live.
  2. Web site: CITIC Group Corporation: Brief Introduction . CITIC Group . August 17, 2015 . https://web.archive.org/web/20160304090526/http://citicgroup.com.cn/wps/portal/!ut/p/b1/04_Sj9CPykssy0xPLMnMz0vMAfGjzOI9w8zcLULdQoM9XV1MDRxNXL283H09DE1cjPQLsh0VAc_K3bQ!/?lctn=1&flag=61 . March 4, 2016 . dead .
  3. Web site: Citic Group Contact. 2012-02-24. https://web.archive.org/web/20130310083652/http://www.citicgroup.com.cn/wps/portal/encitic/lxwm. 2013-03-10. dead.
  4. News: Liu . Alfred . Citic Joins Chinese State Firms Boycotting Cathay Pacific . 17 August 2019 . Bloomberg Business . August 14, 2019 . 2020-06-09 . https://web.archive.org/web/20200609232731/https://www.bloomberg.com/news/articles/2019-08-15/citic-joins-chinese-state-firms-boycotting-cathay-pacific . live .
  5. Web site: CITIC Limited Corporate Profile. citic.com. en. 2017-09-22. https://web.archive.org/web/20170923004816/http://www.citic.com/AboutUs/CorporateProfile. 2017-09-23. dead.
  6. Web site: en. The Global 2000 2023. Forbes. 2024-02-07. 2024-01-29. https://web.archive.org/web/20240129031905/https://www.forbes.com/lists/global2000/?sh=4f5ab07e5ac0.
  7. Web site: Citic Limited. dead. https://web.archive.org/web/20120620170208/http://www.citic.com/wps/portal/!ut/p/c4/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gTAx-XEOdAw8BgZyMzA09DR1dLdxcLI39HQ_2CbEdFAGU5jCs!/. 2012-06-20.
  8. Yung was another transliteration of the same surname: .
  9. Book: Faligot, Roger . Chinese Spies: From Chairman Mao to Xi Jinping . Chinese Spies: From Chairman Mao to Xi Jinping . June 2019 . . 978-1-78738-096-7 . 204 . en . Lehrer . Natasha . 1104999295 . Roger Faligot . Natasha Lehrer.
  10. Book: zh:香港中資財團. Xiānggǎng zhōngzī Cáituán. Róng Yìrén yǔ Zhōngxìn de dànshēng. zh:榮毅仁與中信的誕生. 郭國燦 [Guócàn, Guō] . Hong Kong . Joint Publishing (Sino United Publishing). zh-hant. 978-962-04-2886-9. October 2009. 1. 71–81.
  11. News: https://www.mpfinance.com/php/daily2.php?node=1514919051005&issue=20180103. zh:國泰「反狙擊」協議全面曝光 主席需太古提名 非國泰推薦國航禁售股權. 3 January 2018. 15 August 2019. Ming Pao. Media Chinese International. Hong Kong. zh-hk. 25 September 2020. https://web.archive.org/web/20200925043709/https://www.mpfinance.com/php/daily2.php?node=1514919051005&issue=20180103. live.
  12. News: http://orientaldaily.on.cc/cnt/finance/20090818/00202_001.html. zh:中信掟國泰套73億. 18 August 2009. 15 August 2019. Hong Kong. Oriental Daily News. Oriental Press Group. zh-hk. 29 April 2021. https://web.archive.org/web/20210429041741/http://orientaldaily.on.cc/cnt/finance/20090818/00202_001.html. live.
  13. zh:国务院办公厅转发中国康华发展总公司关于所属子公司撤并转方案请示的通知. 7 February 1990. 国办发. 1990. 5. zh-cn. General Office of the State Council. Beijing.
  14. Book: Curtis . Simon . The Belt and Road City: Geopolitics, Urbanization, and China's Search for a New International Order . Klaus . Ian . . 9780300266900 . New Haven and London . 2024 . 10.2307/jj.11589102 . jj.11589102.
  15. News: Citic Pacific could lose $2 billion from foreign exchange trading . Keith Bradsher . . 2008-10-20 . 2012-02-24 . 2011-12-24 . https://web.archive.org/web/20111224064149/http://www.nytimes.com/2008/10/20/business/worldbusiness/20iht-citic.3.17108990.html . live .
  16. News: CITIC Pacific warns potential $2 billion forex losses . Alison Leung, Ruth Wong . . 2008-10-20 . 2017-06-30 . 2015-11-07 . https://web.archive.org/web/20151107080803/http://www.reuters.com/article/2008/10/20/us-citicpacific-idUSTRE49J5NI20081020 . live .
  17. Web site: Heads roll as $15.5b losses loom. 2008-10-21. Katherine Ng. The Standard. dead. https://web.archive.org/web/20121026101329/http://www.thestandard.com.hk/news_print.asp?art_id=73153&sid=21085671. 2012-10-26.
  18. News: http://hk.news.yahoo.com/article/081021/3/8tvg.html. https://web.archive.org/web/20081026011839/http://hk.news.yahoo.com/article/081021/3/8tvg.html. dead. 2008-10-26. zh:中信泰富暴挫55.1%. Sing Tao Daily. 2008-10-21. zh-hk. yahoo!.
  19. Web site: CITIC Limited Receives Investment from Charoen Pokphand Group and ITOCHU. 20 January 2015. 20 October 2016. Itochu, Charoen Pokphand and CITIC Group. 21 October 2016. https://web.archive.org/web/20161021011113/https://www.itochu.co.jp/en/news/press/2015/__icsFiles/afieldfile/2016/09/02/news_150120_en.pdf. live.
  20. News: Itochu, CP to jointly invest 1 trillion yen in China's CITIC Group. 22 January 2015. Nikkei. 20 January 2015. 22 January 2015. https://web.archive.org/web/20150122103454/http://asia.nikkei.com/Business/Deals/Itochu-CP-to-jointly-invest-1-trillion-yen-in-China-s-Citic-Group. live.
  21. News: Fukase. Atsuko. Thaw in Japan-China Business Ties? Itochu's CITIC Deal Towers Above Others. 22 January 2015. Wall Street Journal Japan Real Time. 20 January 2015. 13 September 2018. https://web.archive.org/web/20180913192425/https://blogs.wsj.com/japanrealtime/2015/01/20/thaw-in-japan-china-business-ties-itochus-citic-deal-towers-above-others/. live.
  22. Web site: en. Huarong Sends $1.7 Billion Back to Citic After Asset Sales. Bloomberg. 2024-02-27. 2024-02-28. https://web.archive.org/web/20240228023135/https://www.bloomberg.com/news/articles/2023-11-15/china-huarong-buys-5-stake-in-citic-for-1-74-billion?leadSource=uverify%20wall.
  23. Web site: en. Huarong Sends $1.7 Billion Back to Citic Group After Asset Sales. Caixin Global. 2024-02-27. 2024-02-28. https://web.archive.org/web/20240228023621/https://www.caixinglobal.com/2023-11-16/huarong-sends-17-billion-back-to-citic-group-after-asset-sales-102136472.html.
  24. News: UPDATE 1- CEFC Energy Retail Bondholders File SFC Complaint against Bond Bookrunner CLSA. Debtwire. 2020-12-30. 2021-03-29. 2021-04-20. https://web.archive.org/web/20210420005432/https://www.debtwire.com/info/cefc-energy-retail-bondholders-file-sfc-complaint-against-bond-bookrunner-clsa. live.
  25. News: UPDATE 1-China's CITIC to pay CEFC Europe's 450 MLN euro debt - CEFC official. Reuters. 2018-05-09. 2021-03-29. 2021-04-29. https://web.archive.org/web/20210429043126/https://www.reuters.com/article/china-cefc-czech-citic/update-1-chinas-citic-to-pay-cefc-europes-450-mln-euro-debt-cefc-official-idUSL8N1SG7V8. live.
  26. News: UPDATE 2-J&T Private Investments says takes over shareholder rights in CEFC Europe. Reuters. 2018-05-17. 2021-03-29. 2018-07-05. https://web.archive.org/web/20180705080803/https://uk.reuters.com/article/china-cefc-czech/update-1-jt-private-investments-says-takes-over-shareholder-rights-in-cefc-europe-idUKL5N1SO6E5. live.
  27. News: UPDATE 1-CEFC Shanghai International defaults on $327 MLN in bond payments. Reuters. 2018-05-21. 2021-03-29. 2021-04-29. https://web.archive.org/web/20210429011149/https://www.reuters.com/article/china-bonds-cefc/update-1-cefc-shanghai-international-defaults-on-327-mln-in-bond-payments-idUSL3N1SS3NB. live.

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