China Huarong Asset Management Corporation (AMC), together with China Cinda AMC and the Industrial and Commercial Bank of China (ICBC), yesterday submitted an application to the Hubei High People's Court to declare the company bankrupt, according to Huarong.

The firm's financial reports show that by the end of June last year its total assets stood at 870 million yuan (US$105 million), and debts stood at 540 million yuan (US$65 million). Huarong is owed 108 million yuan (US$13 million).

A Huarong official, who did not want to give his name, said there was little chance of restructuring Monkey King, the only way to rescue the company from being delisted.

"We have neither considered such a possibility, nor negotiated with other sides on the issue,'' he said.

He hinted that they will compromise only after the company pays back debts and fulfils its obligations. "But, so far, there is no such sign from the company,'' he added.

Huarong, Cinda, ICBC, and the China Great Wall AMC are also major creditors of Monkey King Co Ltd's parent company, the Monkey King Group, which is already being wound up because of bankruptcy, according to the Yichang Intermediate People's Court, Hubei Province. Huarong owns 622 million yuan (US$72.9 million) of creditors' rights in the group.

Huarong accused the group of having maliciously transferred its assets to other companies without informing creditors.

According to the Huarong official, Monkey King Group's 3.4 billion yuan of assets at the end of 1999 had shrunk drastically to just 370 million yuan (US$44.6 million) by the time it announced bankruptcy in February this year. Much money disappeared in the last few months, said the spokesman.

The group's debts stood at 2.4 billion yuan (US$288.7 million) by the time of bankruptcy, barely down from the 1999 level of 2.8 billion yuan (US$333.7 million).

If this happens, less than 10 per cent of the debts can be recovered, which is huge loss of State assets, said the official.

He said the group had stalled on negotiations with creditors and had asked them to accept reality.

Chen Huayuan, the mayor's assistant in Yichang, where Monkey King Group is headquartered, admitted recently to the media that the city had taken 524 million yuan (US$63 million) of assets from the group since last August. But he denied the figure was as much as 2 billion yuan (US$240 million).

ST Monkey King Co Ltd became subject to special treatment, given when companies suffer two consecutive years of loss, this month after its parent company filed for bankruptcy.

"We hope the court will help us liquidate the company so as to protect State creditors and improve the stock market's credit system,'' said the Huarong official.

(China Daily 03/23/2001)