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China Auditor Blames CIC Mismanagement for Investment Losses

Mismanagement at China Investment Corp., the nation’s $575 billion sovereign wealth fund, led to overseas investment losses that could widen, according to the National Audit Office.

A dereliction of duty by managers, and inadequate due diligence and post-investment management were identified in 12 investments made abroad by the fund between 2008 and 2013, according to results of an audit conducted last year, that didn’t identify the individual cases. Six of the deals were unprofitable, four of them had unrealized losses, and two may potentially lose money, according to the report released today on the auditor’s website, which didn’t name the investments or disclose their size.