The parent of BMW AG’s main Chinese joint-venture partner has canceled a plan to pledge shares in a Hong Kong-listed subsidiary for loans amid accusations that the state-owned automaker was deliberately failing to pay its debts.
Liaoning Xinrui Automotive Industry Development Co. Ltd., a wholly owned subsidiary of Brilliance Auto Group Holdings Co. Ltd., has terminated the plan to pledge a 30.4% stake in Hong Kong-listed Brilliance China Automotive Holdings Ltd..
Some investors suspected that Brilliance Auto may have deliberately failed to pay its debts by offloading core assets, as the company reached an agreement to transfer all of its shares in Brilliance China to Liaoning Xinrui just one month before it defaulted on a bond in October.