C C Land Denies Report Company, Chairman Defaulted on Property Purchases
C C Land Holdings Ltd. (1224), a Chinese developer, denied a Hong Kong Economic Journal newspaper report that Chairman Cheung Chung Kiu bought properties from Renhe Commercial Holdings Co. and defaulted on 2 billion yuan ($314 million) of payments linked to the purchases.
C C Land, whose developments are mainly in western China, dropped 9.3 percent to HK$1.57 at the close in Hong Kong, while Renhe fell 9.6 percent to 94 Hong Kong cents. Renhe pared losses of 16 percent, the most in more than two months.
“It is a pure rumor and anything that the newspaper reported is incorrect,” said Eva Chan, C C Land’s Hong Kong- based spokeswoman, adding that the company also didn’t buy properties from Renhe. “C C Land and Mr. Zhang didn’t default on any debt. Mr. Zhang’s personal financial conditions are healthy.” Cheung is also known as Zhang Songqiao and has a net worth of $495 million, according to Forbes’s estimates last year.
Neither Cheung nor C C Land was involved in the sale or other projects, Renhe said in a statement to the Hong Kong stock exchange today.
Renhe, a Harbin-based shopping mall developer, has received 30 percent of the payment from the sale of a shopping mall in China’s western city of Chengdu, while the remaining 70 percent of HK$1 billion ($129 million) was due to be paid by Nov. 30, the company said in the statement. The company is negotiating with buyers and expects the balance to be settled in the “next few months.”
Cheung has not acquired any related projects or other Renhe developments, C C Land said in a separate statement to the Hong Kong stock exchange today.
The credit outlook for Chinese developers will be “increasingly severe,” according to a September report by Standard & Poor’s. The government expanded property curbs this year including raising down-payment and mortgage requirements, and imposed purchase restrictions in about 40 cities to avert an asset bubble.
China’s home prices in October had the worst performance this year, falling from September in 33 out of 70 cities monitored by the government.
--Bonnie Cao. Editors: Andreea Papuc, Linus Chua
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