Mismanagement at China Investment Corp, the nation's US$575 billion (HK$4.48 trillion) sovereign wealth fund, led to overseas investment losses that could widen, according to the National Audit Office.
A dereliction of duty by managers and inadequate due diligence and post- investment management were identified in 12 investments made abroad by the fund between 2008 and 2013, according to results of an audit conducted last year.
Six of the deals were unprofitable, four of them had unrealized losses, and two may potentially lose money. The report released yesterday did not name the investments or disclose their size.
Auditors also found that CIC's domestic unit, Central Huijin Investment, lost 1.26 billion yuan (HK$1.57 billion) in potential investment gains in 2011.