Agricultural Bank of China calls in Wison loans worth HK$235m

PUBLISHED : Thursday, 26 September, 2013, 12:00am
UPDATED : Thursday, 26 September, 2013, 3:35am

The woes are mounting at Wison Engineering Services, with Agricultural Bank of China (ABC) calling in 186 million yuan (HK$235 million) of loans to the Hong Kong-listed firm, sparking fears that other banks may follow.

Top executives of Wison, a supplier of engineering services and equipment to PetroChina, are being investigated on the mainland, with the probe believed to be linked to the Communist Party's investigation of former Politburo Standing Committee member Zhou Yongkang. Zhou, the mainland's former security tsar, was once general manager of PetroChina's state-owned parent, China National Petroleum Corporation.

Wison said yesterday its subsidiary, called Wison Engineering, had received a demand from ABC for repayment of 186 million yuan of loans plus interest, accounting for 10 per cent of Wison's bank borrowings. Wison said it had not breached any terms of its loans.

"The company has been in discussions with ABC and has been endeavouring, on a confidential basis, to explore a withdrawal of the demand," Wison said. "The two parties are currently in dialogue, seeking a mutually-acceptable solution."

An equity analyst said the bank's demand could be a sign it knew "something about Wison that normal investors don't".

A credit-rating analyst said: "Normally, if one bank calls in its loans, other banks will follow, because other banks want to protect their interest. Normally, an avalanche of loan demands will happen."

On September 19, Wison said it was unable to contact its chairman, Hua Bangsong, and finance executive Zhao Hongbin, who were assisting the mainland authorities in a probe. The authorities had also seized company records and frozen some of its bank accounts, Wison said.

Wison's chief financial officer, Chen Wenfeng, resigned on September 18.