Shenzhen-based Ping An has denied what it calls an «untrue story» claiming that the Chinese government had asked it to take a controlling stake in troubled property developer Country Garden.

Yesterday, a «Reuters» report citing multiple anonymous sources claimed that the Chinese government had asked Ping An to take a controlling stake in Country Garden. The troubled property developer is facing liquidity pressures from 1.4 trillion yuan ($190 billion) in total liabilities, as of the end of June. 

While Ping An «categorically denied» the claim of a government request for a takeover, Reuters nonetheless published the article with the response. And now, the insurance giant has taken a relatively unusual move by issuing an additional statement naming the major media outlet.

«[Ping An] hereby solemnly declares that the Reuters story is untrue, and that it has not received such requests from any relevant government departments/agencies,» the statement said. «The company has clarified its position upon receiving the relevant enquiries from Reuters. The company expresses its deep regret that Reuters still insists on publishing the relevant untrue story.»

Reuters' Claims

The article by Reuters includes detailed claims by the sources about the takeover request, from entities and timelines to the reasoning behind the decision.

According to the report, China’s State Council instructed the local government of Guangdong, the home province of both companies, to help arrange a rescue of Country Garden. The proposed deal is for Ping An to take a stake of more than 50 percent in the developer but authorities are allowing leeway for the insurer to negotiate the terms of the deal.

Why Ping An?

The report notes that Ping An was selected due to the fact that it has been a major shareholder in Country Garden and also because it is located in the same province. Authorities said they were keen to have the liquidity issues resolved within Guangdong. 

As of August 11, Ping An held a 4.99 percent stake in Country Garden, according to Hong Kong stock exchange data. 

Talks began in late August and are still in the early stages. Other authorities involved include the National Financial Regulatory Administration (NFRA) as well as the financial markets department of the People’s Bank of China (PBOC). 

Bloomberg Report

Ping An is not the only one to deny the claims. According to a «Bloomberg» report also citing unnamed sources, the insurer had already offloaded its Country Garden stake last quarter and has no takeover plans.

Last month, Country Garden was deemed to have defaulted for the first time after missing the initial deadline and the subsequent 30-day grace period on a $15 million coupon.