November 15, 2019 / 11:35 AM / a month ago

China takes over brokerage arm of troubled energy conglomerate CEFC

BEIJING (Reuters) - China securities regulator said on Friday that CEFC Shanghai Securities Co, part of conglomerate CEFC China Energy Co Ltd, has been taken over by state-owned Guotai Junan Securities Co due to irregularities.

Guotai Junan will administer the business of CEFC Shanghai Securities for no longer than 12 months, the China Securities Regulatory Commission (CSRC) said.

The action will not affect other securities companies, the CSRC said in a separate statement.

“The brokerage arm has offered illegal loans for its parent CEFC Shanghai International Group and relevant parties, (and) carried out illegal asset management business,” the CSRC said. “Indicators on its risk control showed that the firm is no longer capable of running a securities business.”

CEFC Shanghai Securities is banned from business operations starting Nov.15, the CSRC said, while the assets of its clients remain safe.

Once fast-growing, CEFC defaulted on bonds last year and its former chairman Ye Jianming was put under investigation by authorities. It has conducted several sales of overseas assets that it had bought in recent years.

Reporting by Cheng Leng, Ryan Woo and Beijing Monitoring Desk; editing by Jason Neely

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