The Dalian Shide Group, a Chinese private enterprise whose chairman Xu Ming is reportedly being investigated for economic problems, denied news reports the company has started bankruptcy proceedings, saying they were "pure rumors."
Caixin earlier reported on its website that Shide was quietly filing for bankruptcy, citing an unidentified law firm that the magazine said was appointed by Shide to handle some preparatory work.
In a statement yesterday Shide billed the Caixin report "pure rumors" and said its operations are normal. The group has 120 subsidiaries and employs more than 5,000 people.
Chinese media have speculated that Shide, based in Dalian in Liaoning Province, may face funding problems following Xu's disappearance, prompting a review of loans made to the company.
Chinese banks may have lent Shide, whose holdings range from building materials to finance to home appliances, a total of 8 billion yuan (US$1.3 billion), according to reports. Lenders, including the China Construction Bank, have reportedly suspended lending to the group and begun to investigate previous loans, the media said. CCB has declined comment.
Still, Shide said yesterday in a statement it has won "understanding and support" from banks and clients by following the "instructions" of the Dalian government. Xu, who founded the company in 1992 and was named by Forbes as the eighth richest person on China's mainland in 2005, has not been in contact with Shide since March 14.
Shide didn't mention Xu in the statement. Some media reports said Xu may be investigated for a soccer corruption scandal that had brought down some senior Chinese sport officials. Shide owns Dalian Shide Football Club.