Direct Investors Pull out of China Because of Fraud, AWSJ Says
Hong Kong, Oct. 11 (Bloomberg) -- Direct investment firms, including Newbridge Capital Ltd., Citigroup Inc., Crosby Asset Management Ltd. and Carlyle Group L.P. are slowing the pace of their China investments, avoiding that country in favor of others or are pulling out of transactions because of widespread fraud and control issues, the Asian Wall Street Journal reported. Goldman, Sachs & Co. is one of the few investors that has seen success, the newspaper said. Direct investment firms, which buy stakes in private companies, reported that often the money is used for activities other than ones agreed, companies fail to deliver their end of investment or implementing plans and local governments rarely intervene when fraud is evident, the newspaper said.
China's foreign direct investment in the first eight months of 1999 fell 9.7 percent on year to $24.75 billion, and the country may post its first full year drop in 20 years, local media reported.
(AWSJ 10/11, p.1, www.awsj.com)
Oct/10/1999 21:27
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