Industrial and Commercial Bank of China (1398), the world's biggest lender by market value, is facing a loan default of as much as three billion yuan (HK$3.72 billion) by a Shanxi-based mining company, mainland media said yesterday. ICBC's president Yang Kaisheng and chairman Jiang Jianqing visited Shanxi provincial officials to find a solution to the problem, but no conclusion was reached, the report said.
In 2010, ICBC's Shanxi branch refused a loan to mining firm Zhenfu Energy Group and referred it to China Credit Trust for fund raising instead, Guangzhou-based Money Week magazine reported.
The firm, whose trustee is ICBC, issued a trust product worth three billion yuan to Zhenfu Energy in February 2011, due in 2014. The People's Insurance Co (Group) of China (1339) owns a 32.9 percent stake in China Credit Trust.
Shanxi police accused Zhenfu Energy of illegal fund-raising and absorbing underground deposits, which totalled about 413 million yuan, the magazine said.
The mining firm has faced three lawsuits in the second quarter, all due to problematic fund raising, the report said. Therefore, the coal miner is probably on the brink of liquidation.
NATALLIE CAI
