China’s government takes control of US-bashing credit rating agency Dagong, which rated US debt lower than Chinese issues
- Restructuring of one of China’s big four credit rating agencies comes as Beijing tries to boost its domestic bond market
Dagong Global Credit Rating, one of China’s oldest and biggest rating firms, has been taken over by the central government after its mainland licence was suspended last year from the bond market business for “chaotic” management problems and providing “fake” information.
China Reform Holdings, a central government-owned enterprise, said in a statement on Thursday that it has acquired a controlling stake in Dagong and will put it under a strategic restructuring.
“It’s not simply a nationalisation of the credit rating firm,” the Beijing headquartered company said.
“The state control has changed Dagong’s ownership structure from a single shareholder to a mixed structure and will improve its corporate governance.
“The mixed ownership structure will help ensure Dagong’s independence as a third party rating agency.”
Critics have raised concerns over whether China’s rating agencies are sufficiently independent from the companies they rate.
