CITIC Securities Co , China’s biggest brokerage, has halted plans for a corporate bond issue that domestic media said aimed to raise billions of dollars, a statement posted on the website of country’s securities regulator showed, amid reports CITIC faces increased scrutiny.
The statement by the China Securities Regulatory Commission (CSRC), dated Dec. 8, said the watchdog had received a notice from CITIC requesting its application to issue bonds be withdrawn. No reason for the request was given in the CSRC statement, posted on Dec. 11, according to Chinese media.
A CITIC Securities spokesman declined to comment when contacted by Reuters. The CSRC didn’t immediately respond to a fax seeking comment.
The change of plan comes amid growing uncertainty over the brokerage. On Dec. 13 CITICsaid it was unable to contact two top executives, following media reports they had been asked by authorities to assist in an investigation. In August, the official Xinhua news agency reported four senior CITIC officials had also confessed to insider dealing.
Standard & Poor’s on Monday downgraded CITIC Securities‘ long-term issuer credit rating to BBB from BBB+ as the brokerage’s business position and capital strength have been “significantly” hit by China’s stock market turmoil and regulatory probes.
CITIC had planned to issue corporate bonds worth 22.5 billion yuan ($3.48 billion), according to Chinese business magazine Caixin.
The bond issue was to be underwritten by Huatai United Securities, according to the CSRC statement. A Huatai United official said its investment bankers weren’t available for comment.
(Reporting by Engen Tham in SHANGHAI and Shu Zhang in BEIJING; Editing by Kenneth Maxwell and Gopakumar Warrier)