The State Administration of Foreign Exchange (SAFE), China's foreign exchange regulator, has invested about US$6.7 billion in nearly 50 British firms, Caijing Magazine reported on Monday.

According to data provided by Thomason Financial, SAFE now owns stakes in some of Britain's best known companies, such as Barclays Capital, Royal Bank of Scotland Group, British Gas, Cadbury, Drax Group, Unilever, Tesco, WPP Group, Legal & General, and Old Mutual. Australian iron ore giants Rio Tinto and BHP Billiton are also on the list, with 0.52 percent and 0.5 percent of stock held by SAFE, respectively.

Royal Bank of Scotland Group, Cadbury, Drax Group and Tate& Lyle PLC all confirmed the SAFE investments in their stock to Caijing Magazine.

"The SAFE purchase was completed quite a long time ago," said a source with Drax Group, "we were aware of the purchase, because SAFE was very open and clear about its investment."

The investment was made through SAFE Investment Company Limited, a Hong Kong-based wholly-owned subsidiary of SAFE. The company was founded on June 2, 1997, with a registered capital of HK$100 million. According to its company charter, SAFE Investment Company mainly invests in securities, foreign exchange and commodities. It can also engage in investment funds management, state foreign exchange reserves management and other business authorized by the People's Bank of China.

Apart from SAFE Investment Company, SAFE has also been using other vehicles to buy stakes in British firms. The media relations manager of Severn Trent Plc, the largest water company in Britain, confirmed to Caijing Magazine that SAFE has bought a 0.86 percent stake in Severn Trent through a company named VIDACOS. British's No.2 insurer Prudential Financial also said that SAFE had purchased 1 percent of its stock via an anonymous account.

For more details, please read the complete story in Chinese:

(http://www.caijing.com.cn/2008-09-08/110010856.html)

(China.org.cn by Yan Pei, September 8, 2008)