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China halts funding for property sale by Li Ka-shing's CK Asset: sources
[NEW YORK] China's financial regulators have instructed banks to pull credit lines meant to finance the HK$2.5 billion (S$443.7 million) sale of a Chengdu property by CK Asset Holdings, according to people familiar with the matter.
Billionaire Li Ka-shing's firm said in July that it planned to sell its subsidiary developing residential complexes in one of the most expensive neighboUrhoods in the sprawling south-west city, and would provide financing for the buyers to complete the transaction.
But regulators this week instructed local banks to halt credit support aimed at financing the Chengdu sale and subsequent asset restructuring, citing concerns of risk, the people said. China's property regulator held meetings with government officials in six cities including Chengdu in August, asking them to control property prices.
The project is known as Chengdu Le Parc, a high-end residential and commercial development in the city's tech zone. The buyers were two local developers: Chengdu Ruizhuo Real Estate and Yuzhou Group Holdings, a company listed in Hong Kong.
The Chengdu financial regulatory bureau said in a statement on Wednesday that it was investigating and punishing "hoarding behaviour", including the Chengdu Le Parc project.
A representative for CK Asset said that the project was no longer a subsidiary and didn't immediately respond to email queries about the government notice.
A Yuzhou Group representative said via a text statement that it didn't hoard land. It only bought the project in July and has been following government procedures. Chengdu Ruizhuo Real Estate declined to comment.
It's unclear whether Chinese regulators are applying extra scrutiny to Mr Li's company, which has been accused by state media in recent years of selling out the country and contributing to social unrest in Hong Kong. While the billionaire's business empire is expanding in China in some areas, it has been reducing overall exposure.
CK Asset's shares are down 32 per cent this year, compared with a 17 per cent drop in the benchmark Hang Seng Index.