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Rampant Corruption In The World’s Last Oil Frontier

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Endemic corruption in Kurdistan continues…

CEFC Drops European Expansion, CEO Steps Down

CEFC

CEFC China Energy Co. has announced that it is abandoning its plans to acquire 50 percent in Czech-Slovak holding J&T Finance Group. This is the latest from an energy company with interests in finance, which recently made headlines as it became the object of a probe in its native China.

The probe has now led CEFC’ China Energy’s chairman to step down, Reuters reported, citing a source close to the move. The company has not officially confirmed it yet.

Ye Jianming founded CEFC in 2002 as an oil trading company, which grew into an energy conglomerate with the resources to splash US$9.1 billion on the acquisition of a 14-percent stake in Russia’s Rosneft, which gave it access to 12 million tons of crude. At the time, the news raised quite a few eyebrows as the more logical candidate for a hefty stake in such a large company would be a state oil and gas player.

Yet CEFC, it appeared, had Beijing’s favor. The company is the largest private energy business in China and has been investing heavily both at home and abroad, including projects in Central Asia, Eastern Europe, and the Middle East. At home, the company has been buying and building oil storage capacity. CEFC has even been entrusted with storing part of China’s strategic petroleum reserve. Besides its energy business, CEFC is also active in financial services and online insurance.

Related: Solving Renewable Energy’s Biggest Problem

It is widely believed that CEFC’s chief executive attracted the attention of financial regulators as part of a crackdown on large Chinese companies suspected of reckless spending, which heightens financial risk in the country. As part of the crackdown, the government took control of Anbang Insurance group last month.

Although the company, in its own words, is operating normally, the dropped Czech deal was to be the biggest CEFC acquisition in the Central European country, where it already has significant interests. What’s more, Reuters reports, a Chinese state-owned entity, Huarong Asset Management Co, has bought a 36.2-percent stake in CEFC Hainan International. That’s the unit that will acquire the stake in Rosneft.

By Irina Slav for Oilprice.com

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