CKB Solutions
  • Home
  • Meet CKB
    • Greg Kovacic, CFA
  • Expertise & Experience
  • Case Studies
    • Corporate Finance
    • Doing Business in China
    • Market & Feasibility Studies
    • Marketing Communications
    • Operations & Organization
    • Strategy & Execution
  • Insights
    • 'Do' Diligence
    • Asia Marcoms M&A3
  • CKBlog
  • Contact Us
  • 中文
    • 关于CKB
    • CKB介绍 >
      • Greg Kovacic, CFA 简历
    • 专业知识与经验
    • 客户案例
    • 联系CKB

In China, when there is the opportunity for employees to use their company positions for personal gain, assume they are doing so

5/15/2013

 
Picture
Article in SCMP about shadow banking practices includes telling examples of how business is really done in China.

Conflict of interests are rife in China.  When there is the opportunity for employees to use their company positions for personal gain, assume they are doing so.  Even if they have to put personal interests and enrichment at the expense of company interests.  Chalk this up to the lack of a moral compass in Chinese culture as the result of the communist government stamping out religion.  Everything is acceptable unless caught.  Company policies are not compliance in China.
  • With an average loan size of 133,000 yuan, loans of 20 million yuan loan to a fish farm and a 5 million yuan loan to a furniture store. Within a year, both defaulted.
  • Undeterred by the defaults, made another 20 million yuan loan at cut-price rates and over an unusually long maturity to a small local air-conditioner company that boasted it was in line for a stock exchange listing.  Discovered,  the managers had accepted stock options from the company in the hope that a loan would translate into a handsome profit for themselves personally when the borrower finally listed.
  • Private equity investor who used his connections with a big state bank to obtain cheap funds, which he proposed investing in local government infrastructure projects. Only his "equity" stakes would come complete with a buy-back clause, which effectively meant they were loans, disguised to allow the bank's executives to exceed both their loan quotas and their lending rate cap to pocket a handsome 25 per cent return."

Source:
"Illuminating confessions from a shadow banker", South China Morning Post, May 15, 2013.
http://www.scmp.com/business/article/1237823/illuminating-confessions-shadow-banker

CKB Solutions is all about real solutions for the real world.  To learn how we can help your business, contact Greg Kovacic in Hong Kong.



Comments are closed.

    Author

    Greg Kovacic is a Director with CKB Solutions in Hong Kong. He advises senior executives and entrepreneurs on strategy, corporate finance, operations and marketing with a focus on crafting real solutions for the real world.  
    You can contact Greg at: greg@ckbsolutions.com

    View my profile on LinkedIn

    Categories

    All
    Accounting Shenanigans
    Bad Marketing 101
    Brand Building 101
    Bright Ideas
    China Business
    China Business
    China Facade
    China Food Scandal
    Continuous Improvement
    Corporate Finance
    Digital
    "Do" Diligence
    Economics
    Emerging Market Business
    India Business
    Indonesia Business
    Industry: Airlines
    Industry: Appliances
    Industry: Auto
    Industry: FMCG
    Industry: Food
    Industry: Healthcare
    Industry: Hotels & Hospitality
    Industry: Insurance
    Industry: Mobile Games
    Industry: QSR
    Industry: Retail
    Industry: Smartphones
    Industry: Toys
    International Expansion
    Marketing
    Other
    Smart Social Business
    Strategy
    Waste Of Taxpayer Money

    RSS Feed

Powered by Create your own unique website with customizable templates.