Bank of China

PBOC tackles Gitic debt puzzle

PUBLISHED : Friday, 16 October, 1998, 12:00am
UPDATED : Friday, 16 October, 1998, 12:00am


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The People's Bank of China (PBOC) said yesterday it was studying ways to cover the unregistered foreign debts of collapsed Guangdong International Trust and Investment Corp (Gitic).

A PBOC official said no decision had been made and the central bank would issue a statement shortly to clarify repayment details.

The official said they arrived at a solution needed to take into account the complexities and legal problems associated with debts that were not registered with the State Administration of Foreign Exchange (Safe).

The unregistered debt should amount to at least $3.5 billion, or a third of the Hong Kong Monetary Authority's assessment of $11 billion in direct exposure and contingent guarantees by more than 80 banks in Hong Kong. Whether Beijing will honour those debts has created confusion and anxiety among foreign bankers in Hong Kong, particularly those which had links to Gitic.

The PBOC has said repayment priority will be given to foreign debts registered with Safe and legal deposits by mainland individuals.