CEFC China Energy Seized by Shanghai Government, SCMP Reports

(Bloomberg) -- Chinese conglomerate CEFC China Energy Co. has been taken over by an arm of the Shanghai government, the South China Post reported, citing two sources it didn’t identify.

Shanghai Guosheng Group Co., an investment agency controlled by the Shanghai city government, has assumed management and daily operations of the company since last week, according to the report by the Hong Kong-based newspaper.

A CEFC spokeswoman told Bloomberg News on Friday that the company is operating normally and reiterated its statement Thursday night that recent reports about Chairman Ye Jianming, including that he had been investigated by authorities, are “unfounded.” Nobody could be reached by the email or phone numbers listed on Guosheng’s website.

The attention on CEFC and Ye comes amid President Xi Jinping’s crackdown on debt-fueled expansion and scrutiny of the nation’s rising tycoons. Authorities last month took control of Anbang Insurance Group Co., best known for its purchase of New York’s Waldorf Astoria hotel, and forced Tomorrow Holding Co. to divest many of its financial assets.

CEFC came into the spotlight last year after it capped a series of deals with an agreement to purchase 14 percent stake in Russian state oil giant Rosneft PJSC for $9 billion. CEFC described itself at the time as the country’s largest private oil and gas company, with 50,000 employees and revenue of more than $40 billion. Its rapid metamorphosis raised curiosity about the company’s origins, how close it is to the government and how it funded the expansion.

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