China's CEFC Threatens To Sue Czech Firm Amid Debt Debacle

Umer Jamshaid Published May 18, 2018 | 01:50 PM

The Prague-based European unit of Chinese private energy group CEFC on Friday threatened to sue a Czech firm that took it over citing CEFC's failure to pay debts.

Prague, (UrduPoint / Pakistan Point News - 18th May, 2018 ) :The Prague-based European unit of Chinese private energy group CEFC on Friday threatened to sue a Czech firm that took it over citing CEFC's failure to pay debts.

J&T Private Investments (JTPI) on Thursday appointed crisis managers to replace the CEFC Europe board over an unpaid debt of 450 million Euros ($530 million). "CEFC Europe shareholders are ready to take all legal steps against J&T including the people the J&T group describes as new CEFC Europe board members," the Chinese company said in a statement on its Czech website on Friday.

Labelling J&T's move as a "hostile takeover," CEFC cited a deal with J&T saying CEFC Europe's minority shareholder CITIC Group, a Chinese state-owned investment firm, had until Friday to pay the debt.

"They missed the deadline so we took this step," J&T spokesman Petr Malek told AFP on Friday, adding the company was ready to continue talks with CITIC. Malek said the crisis managers were tasked with preventing CEFC Europe from selling assets used as collateral, including the Czech top-flight football club Slavia Prague and office buildings in central Prague.

"The crisis management team should above all ensure the stability of the entire CEFC Europe group," he said, adding the new managers would carry out a financial and legal audit at CEFC. CEFC, the seventh-largest private company in China, has invested an estimated 1.5 billion euros ($1.8 billion) in the Czech Republic where it employs more than 4,000 people.

It owns shares in the Travel Service airline, two travel agencies and the Lobkowicz Group of breweries, as well as hotels in Prague. It made the headlines in March this year when oil tycoon Ye Jianming quit CEFC facing police investigation in China over an undisclosed crime.

Ye is an adviser to pro-Chinese, pro-Russian Czech president Milos Zeman, who promotes Chinese investment in this EU and NATO member of 10.6 million people.