HONG KONG • China Huarong Asset Management Co, the state-owned bad-debt manager whose former chairman has been embroiled in a graft probe, plans to restructure its overseas operations in a bid to cut costs, people with knowledge of the matter said.
The company is targeting reductions of more than 50% in staff-related costs at its businesses in Hong Kong and other markets outside China, according to two of the people. Options being discussed involve cutting jobs and pay, said one of the people, who asked to remain anonymous discussing confidential information.
Operations in China won’t be affected, another person said.
Huarong is grappling with bloated costs after Lai Xiaomin, who resigned as chairman in April, rushed to expand overseas, the people said. Total assets ballooned sixfold to 1.87 trillion yuan (RM1.12 trillion) in the five years through December, according to data compiled by Bloomberg. Huarong shares touched a record low last Friday.
Huarong’s woes coincide with a meltdown in Chinese stocks sparked by the nation’s escalating trade frictions with the US In April, the Financial Times reported that some of its employees in Hong Kong were ordered to surrender their travel documents as the corruption investigation reached outside mainland China. Huarong was one of four companies set up by the government in 1999 to help clean up a banking system plagued by bad debts. — Bloomberg