The China Banking and Insurance Regulatory Commission (CBIRC) is reportedly looking into the property investments of Ping An Insurance Group Co. of China due to the insurer’s major exposure to beleaguered developer China Fortune Land Development.
The regulator has also ordered Ping An to cease selling alternative investment products, which are often linked to the property market, according to a Reuters report which cited two sources knowledgeable in the matter. The sources declined to be identified.
According to the sources, the CBIRC’s order for Ping An to stop selling alternative investment products left dozens of employees out of work.
In a statement, Ping An said that its real estate exposure was below the cap set by the CBIRC.
In February, Ping An declared a total exposure of RMB54 billion (SG$11.23 billion) to China Fortune. The insurer suffered an RMB20.8 billion loss due to its investments in the debt-ridden land developer, resulting in a 15% decrease in profit for the first half of 2021.
China Fortune’s debts had ballooned to RMB69.2 billion as of end-June, causing significant stress on its operations and financial liquidity.
Ping An also has property investments in the following property firms: China Jinmao Holdings Group (14.1%), Country Garden Holdings (8%) and CIFI Holdings Group (6.54%).
