Huarong Asset Management has ordered a suspension of new lending to property giant Sunac China Holdings – due to concerns over debt levels.
Lending has been frozen due to worries over Sunac’s high debt levels and the regulator’s intolerance to high corporate leverage.
Executives from Huarong confirmed the internal order reports the South China Morning Post. Huarong also called for heightened risk monitoring and attention to existing loans. The company said that any projects deemed necessary, with controllable risk, will need approval from Huarong’s headquarters.
Sunac specialises in luxury flats. The company has been on a buying spree since early this year. They caught national headlines in July with a 43.8 billion yuan (US$6.7 billion) purchase of more than a dozen tourism property projects from Wanda.
The Wanda Group recently announced they would lend RMB 26.6 billion ($3.9bn) to Sunac China Holdings.
Beijing has ramped up its crackdown on money laundering. The country has initiated a series of measures to keep a check on financial risks ahead of the 19th party congress.
Several of China’s largest overseas asset buyers, including billionaire Wang Jianlin’s Wanda Group have been placed under scrutiny since June.