ASX asks 50 Chinese companies on any capital transfers problem

The Australian Securities Exchange has asked around 50 listed Chinese companies if they were facing problems in capital transfers into or out of China, following the trading suspension of one such company.

Chinese company Ding Sheng Xin Finance suspended trading on August 29, failing to meet its August 31 deadline to lodge its half-year results and did not give any reason as well.

While the market regulator did not identify the specific company involved or its issues, Ding Sheng Xin Finance’s trading suspension led the ASX to seek assurance on whether other Chinese companies had any in problem in funds transfers.

Ding Sheng Xin chairman Winton Willesee did not directly confirm the reason for the delayed accounts but told The Australian Financial Review "of late lots of companies are having that problem" of repatriating funds from China.

The ASX has asked each potentially affected company whether it "has any difficulties in repatriating money/converting Chinese RMB into foreign currencies".

It has also asked whether the company "is aware of any changes to laws in China that prohibit the repatriation of money/conversion of Chinese RMB into foreign currencies?"

The Chinese companies are operating in a variety of sectors, from finance, to resources, to agriculture and property.

The few companies to respond so far, such as developer Boyuan Holdings, have not reported issues with capital transfers.

"The company has had no difficulties repatriating money or converting money into foreign currencies," developer Boyuan Holdings said on Monday.

Boyuan was the first Chinese real estate company to list on the ASX and is an offshoot of the Hong Kong-listed Jiayuan and its seed asset is the Jiayuan Central Plaza Project in Jiaxing City in China.

An ASX spokesman was cited by the AFR as saying that the inquiry was a "precautionary step to help ensure the market is kept informed".

"By asking companies to clarify their position, ASX and investors can assess if the issue is isolated or widespread," an ASX spokesman said.

"Based on the responses released to the market thus far, it appears the funding concerns are specific to one company that is already suspended. But we'll continue to monitor."

The development comes amid the Chinese government’s recent guidelines to curb outbound spending. The Chinese government has put curbs on purchases of real estate and entertainment assets by Chinese companies and investors, a decision which could affect Australia’s real estate market.

The restrictions follows recent moves by Beijing to halt state banks lending to the Dalian Wanda Group, which has recently been forced to restructure its assets in Australia, namely the $2 billion worth of projects in Sydney and the Gold Coast.

Hotels, sporting teams, cinemas and the broader entertainment sector were on the restricted list, while investments in casinos and defence technology were banned.