CITIC Group

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CITIC Group Corporation Ltd., formerly the China International Trust Investment Corporation (CITIC), is a state-owned investment company of the People's Republic of China, established by Rong Yiren in 1979 with the approval of Deng Xiaoping.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Its headquarters are in Chaoyang District, Beijing.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Template:As of it is China's biggest state-run conglomerate<ref name=liu19>Template:Cite news</ref> with one of the largest pools of foreign assets in the world.<ref name=aboutus>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> In 2023, the company was ranked 71st in the Forbes Global 2000.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

BusinessesEdit

Its initial aim was to "attract and utilize foreign capital, introduce advanced technologies, and adopt advanced and scientific international practice in operation and management."<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> It now owns 44 subsidiaries including China CITIC Bank, CITIC Limited, CITIC Trust and CITIC Merchant (mainly banks) in mainland China, Hong Kong, the United States, Canada, Australia and New Zealand.Template:Citation needed

HistoryEdit

File:Capital Mansion (20240420141203).jpg

Capital Mansion was the former headquarters of CITIC from July 1991 to 16 January 2020

CITIC Group was founded as the China International Trust Investment Corporation (Template:Lang-zh; abb. CITIC), a Chinese state-owned enterprise in 1979. In the 1980s, Chinese government founded many for profit corporations, which CITIC was under the leadership of Rong Yiren, a former businessman and politician at that time, who chose to stay in the mainland China in the 1950s after his family business was nationalized.<ref name=book/> His son, Larry Yung,<ref group=nb>Yung was another transliteration of the same surname: Template:Lang-zh.</ref> was the former chairman of CITIC Group's listed subsidiary CITIC Pacific. Larry also led the Hong Kong office and parent company of CITIC Pacific since 1986; Larry became a Hong Kong–based businessman since 1978.<ref name=book/> Throughout the 1980s, Xiong Xianghui served as CITIC vice chair and significant CITIC leadership was drawn from the Intelligence Bureau of the Joint Staff Department.<ref name=":34">Template:Cite book</ref>

CITIC Group headquarters was based in Beijing; Hong Kong office was formally opened in 1985.<ref name=book/> The mainland-based CITIC Bank was founded by the group in 1984.<ref name=book>Template:Cite book</ref> The group also acquired 12.5% stake of the Hong Kong flag carrier Cathay Pacific in 1987,<ref name=book/> and became a member of a shareholders' agreement in 2006;<ref>Template:Cite news</ref> the stake was sold to fellow state-owned company Air China in 2009.<ref>Template:Cite news</ref> The group also acquired Hong Kong–based Ka Wah Bank in 1986.<ref name=book/> In 1990, the group also absorbed some of the subsidiaries of another state-owned company, Template:Lang-zh.<ref>Template:Cite journal</ref> Other notable acquisitions included 38.3% stake of another airline Dragonair, 20% stake of Hong Kong Telecom, etc.<ref name=book/>

CITIC also acquired a Hong Kong listed company and renamed to CITIC Pacific in the 1990s.Template:Citation needed

2000sEdit

{{#invoke:Labelled list hatnote|labelledList|Main article|Main articles|Main page|Main pages}} Beginning in 2008, CITIC Group had the lead role in developing Quilamba in Angola as part of an exchange of Chinese construction materials and expertise for Angolan natural resources.<ref name=":Curtis&Klaus">Template:Cite book</ref>Template:Rp

Its subsidiary, CITIC Pacific (Template:Lang-zh, now known as CITIC Limited), made unauthorized bets on the foreign currency market in October 2008 and lost HK$14.7 billion (US$1.9 billion, when accounted for in mark-to-market terms). Senior executives such as Financial Controller Chau Chi-Yin and Group Finance Director Leslie Chang resigned.<ref>Template:Cite news</ref><ref>Template:Cite news</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Its stock price plunged 55.1 percent upon the resumption of trade.<ref>Template:Cite news</ref>

In 2015, CITIC Group sold 10% stake of CITIC Limited to a joint-venture of Itochu and Charoen Pokphand for HK$34.4 billion (US$4.54 billion); the joint venture also subscribed new convertible preferred shares for HK$45.9 billion (or US$5.9 billion).<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> It was reported it was the largest investment ever made by a Japanese general trading company.<ref>Template:Cite news</ref> The transaction is also the largest acquisition in China by a Japanese company, and the largest investment by foreigners in a Chinese state-owned enterprise.<ref>Template:Cite news</ref>

In 2023, China Huarong Asset Management, the company that manages the troubled assets, contracted to buy 5.01 percent of Citic Limited for HK$13.6 billion (US$1.7 billion). Huarong will acquire a stake from CITIC Group’s subsidiary, Citic Polaris. In addition, Huarong plans to change the name to China Citic Financial Asset Management. The deal is a return on the investment that CITIC invested in 2021, leading the rescue of Huarong.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

CITIC CEFC bond defaultEdit

In November 2016, CITIC CLSA acted as the sole bookrunner for CEFC Shanghai's US$250 bond issuance. CITIC CLSA hid from the market that the bond deal was only 60% subscribed at pricing. It manipulated the bond price in the secondary market in an effort to offload the 100mm USD bond CITIC CLSA held on its balance sheet.<ref name="debtwire.com">Template:Cite news</ref>

In May 2018, CITIC Group announced they would repay ca 450 million euros owed by CEFC Europe to finance and banking group J&T within days but since the debt was not paid a week later, J&T announced it had taken over shareholder rights and installed crisis management at CEFC Europe.<ref>Template:Cite news</ref><ref>Template:Cite news</ref> Several days later, CEFC Shanghai defaulted on $327 million in bond payments, and offered to make the payments six months after the maturity date.<ref>Template:Cite news</ref>

In October 2020, some retail CEFC bondholders in Hong Kong filed a complaint to the Securities and Futures Commission in Hong Kong against the bond's sole underwriter CITIC CLSA.<ref name="debtwire.com"/>