Third bond default by Chinese electronics firm within a month points to wider corporate governance issues

Tunghsu Optoelectronic Technology missed an interest payment on its 1.7 billion yuan (US$241 million) onshore bond on Monday

Some of the defaults by Chinese companies have turned out to be corporate fraud, exposing corporate governance issues, said Ivan Chung of Moody’s

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Tunghsu Optoelectronic Technology, which makes electronic display panels, has repeatedly defaulted on bond payments. Photo: EPA

Published: 6:00am, 3 Dec 2019Updated: 6:00am, 3 Dec 2019

Tunghsu Optoelectronic Technology has failed to make good on a bond – its third in less than a month – as the struggles point to poor corporate governance among Chinese companies.

The maker of electronic display panels, which reported ample cash holdings of more than 18 billion yuan as of September, missed an interest payment on its 1.7 billion yuan (US$241 million) onshore bond due on Monday, according to an exchange filing.

The latest default has cast doubt on whether Tunghsu could meet its obligations on a US$44 million bond maturing in June 2020, after it defaulted two notes totalling 3 billion yuan on November 18.

Tunghsu could not be reached immediately for comment.

Tunghsu is the latest in a growing list of Chinese defaulters this year, as banks have tightened their funding to private companies amid China’s slowest economic growth rate in nearly three decades.

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