Investors Gathered to Demand More Interest Payments
Investors of a troubled high yield trust bond were bailed out last month have gathered at the Shanghai Branch of the Industrial and Commercial Bank of China demanding more interest payments. 20 investors hailing from Zhejiang, Guangdong, Beijing and Shanghai were planning to ask the bank for at least 250,000 yuan in interest that was owed to each of them.
The International and Commercial Bank of China distributed more than US$ 495 million product to their wealthy clients and trust company that issued the products will be responsible for the payments. The discontent of the bailout was averted in what would have been the biggest default in China’s US$ 1.8 trillion market for trust products that underscores the risks that is associated implicit guarantees and the government is backing such investments.
A unidentified spokesperson and group has offered to buy the rights of the Credit Equals Gold No. 1 so to ensure that investors will recouped their principal. These investors put up a minimum of 3 million yuan and have received only three interest payments since 2011. The investors said that the December interest installment didn’t match the return rate that was promised to them.
The high yield product was issued by China Credit Trust Co. and has sold it to more than 700 of the bank’s clients was structured to raise funds for the Shanxi Zhenfu Energy Group.