HuarongThe group, once a high-profile state-owned enterprise, is now about to disappear and become CITIC GroupSubsidiaries。This change has attracted a lot of attention, and one has to wonder what caused itHuarongThe reversal of fate?Let's take a closer look at the rise and fall of this central enterprise.
HuarongThe asset management company is one of the four major state-owned enterprises, which was established in the late 90s of the last century to cope with the timeState-owned banksAccumulated in large quantitiesNon-performing assetsIssue. Due to the serious operating losses of state-owned enterprises, it is causedNon-performing loan ratioThe abnormality is as high as 41 percent, which has brought great challenges to China's WTO accession negotiations. In order to solve this problem, the state proposed to establish an asset management company to undertakeState-owned banksofNon-performing assetsHuarongis one of them.
However, the original disposal plan was not implemented as scheduledHuarongand other four asset companies have not withdrawn from the stage of history. On the contrary, in 2009,Lai XiaominAppointmentHuarongPresident,HuarongBegan a frantic road of expansion. Through mergers and acquisitions and restructuring, they acquiredBanks, private equity, ** consumptionFinanceetcFinancelicense, developed into a giantFinanceEnterprise. In 2015, after listing in Hong Kong, ChinaHuarongThe market value once reached 110 billion yuan, making it the largest state-owned enterprise in ChinaFinancial asset management companies
However, this glorious situation did not last long. In 2018Lai XiaominAfter falling off the horse,HuarongThe true face of the company was revealed. The company's revenue and netProfits**, total assets have also fallen sharply, and it has fallen into operational difficulties. In 2020, it suffered a huge loss, with a loss of 102.9 billion yuan, which made itHuarongIt became the Chinese enterprise with the largest loss that year. And as of the first half of 2023,HuarongContinued to lose money.
1.Management Mistakes:Lai XiaominDuring his tenure, he pursued expansion and exaltation too muchProfits, which led to a deviation in the company's business strategy. He neglected the inside of the companyRisk controland compliance management, over-reliance on external financing, and failure to take risk prevention measures.
2.Corruption scandal:Lai XiaominThe fall of the company uncovered a corruption scandal within the company. He took advantage of his position to manipulate the company's funds for personal profit, and colluded with politicians to form a huge chain of interests. These corrupt practices not only lead to the loss of funds, but also seriously damage the company's reputation.
3.Policy Changes:HuarongIt was founded to deal withState-owned banksofNon-performing assets, but with our countryFinanceWith the reform of the system and the changes in the market environment, the policy orientation has changed. ** Promote market-oriented reforms, put forward higher requirements and stricter supervision for central enterprises, which makes:Huarongand other asset management companies are gradually being diluted.
First of all, the disappearance of central enterprises means that the country's assets are reduced, which will affect the countryEconomyand the development ofCapital marketsstability. HuarongAs a large familyFinanceenterprises, the reduction in the size of their assets will have a direct impactFinanceThe workings of the market.
Secondly,HuarongThe decline of givingInvestmentshas brought significant losses. InHuarongInvestmentsof shareholders and creditors will face huge losses, which may triggerFinanceMarket uneasiness and shaken confidence.
Finally, CITIC Group took overHuarongwill further expand its presence inFinanceThe influence of the industry. CITIC Group is inHuarongwill further enhance its controlling positionFinanceThe strength and competitive advantage of the business.
HuarongAs a central enterprise, it has once achieved brilliant results, with its inFinanceThe leading position in the field has gained great prestige. However, factors such as management failures, corruption scandals, and policy changes have led to thisHuarongEventually, it went into decline and became someone else'sSubsidiaries。This event is not only rightHuarongitself has had a significant impact, but also to the country andFinanceThe market has brought a certain shock. We should learn from this experience and strengthen the management and supervision of central enterprises to avoid the recurrence of similar incidents.