The Wall Street Journal, 17 Nov 2008, RICK CAREW
HONG KONG -- Troubles at a once-highflying Chinese financial firm show there can be pitfalls as well as promise in private-equity investment in China.
Carlyle Group, Citigroup Inc., General Electric Co. and the Asian Development Bank in recent years invested a total of more than $100 million in Credit Orienwise Group Ltd., a privately run company with a nationwide presence and growing profits in a field dominated by state-run firms. Debt investors bought $100 million in bonds of its subsidiary, China Orienwise Ltd., underwritten by Morgan Stanley and traded in Singapore.
Now, auditors Deloitte Touche Tohmatsu question the company's ability to continue as a going concern, and Credit Orienwise has acknowledged allegations of fraud within the company. The company posted a loss for the first half of this year. Directors representing the foreign investors have resigned.
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