China's ICBC says will help repay investors in troubled shadow
SHANGHAI (Reuters) - China's top lender will help bail out investors in a troubled high-yield investment scheme, local media said on Friday, in a move that risks reinforcing the view among Chinese savers they are effectively insured against poor investment decisions.
Industrial and Commercial Bank of China , which sold the 'Credit Equals Gold #1' investment scheme on behalf of a shadow-banking outfit, has qualified its earlier position that it would not bear the 'main responsibility' for repaying investors.
An official at ICBC's Shanghai branch was quoted as saying that ICBC would take some responsibility.
'ICBC won't ignore the issue of its reputation,' the official Shanghai Securities News quoted her as saying.
The official said that most of the roughly 700 investors in the product, created by China Credit Trust Co Ltd, have sought reassurances from ICBC following the news after learning that the product may not pay out as planned on January 31.
'The ICBC has not shirked its responsibility and pushed these investors to go chase China Credit Trust Co Ltd for payment. On this point, ICBC will bear responsibility,' the official was quoted by the newspaper as saying.
The bank will inform investors of its specific decision regarding the product before January 28, the paper reported on Friday.
ICBC did not answer calls from Reuters seeking comment on Friday morning.
The trust product used funds raised from wealthy investors in 2010 to make a loan to a struggling unlisted coal company Shanxi Zhenfu Energy Group Ltd. But Zhenfu collapsed after its vice chairman was arrested in 2012 for accepting deposits without a banking license.
In addition to ICBC, previous news reports said that Shanxi province, in central China, and China Credit Trust may share responsibility for bailing out investors in the closely-watched case viewed as a potential landmark precedent for defaults in China's shadow-bank sector.
ICBC's Hong Kong-listed shares were down 0.8 percent in late morning compared with a 0.3 percent drop for an index tracking the leading Chinese listings in Hong Kong .
(Reporting by Lu Jianxin and Gabriel Wildau; Editing by Jacqueline Wong)
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