The story is an example of the kind of stresses affecting parts of the Chinese economy. Huarong was formed more than two decades ago to remove bad debts from the country's biggest state-owned banks.

Shares in scandal-warped China Huarong Asset Management fell 50 per cent at the market close yesterday. The group’s shares resumed trading yesterday after being suspended for nine months on the Hong Kong Stock Exchange.

Huarong hit Asian stock markets in August last year when it revealed a record loss of close to $16 billion. Its former chairman Lai Xiaomin was executed in 2021 after being found guilty of corruption.

The group, which is among a handful of state-owned distressed-debt managers, halted trading in its shares on 1 April 2021. It had missed a deadline at the end of March to file its earnings for 2020.

Huarong, which is majority-owned by China's Ministry of Finance, was set up in 1999 to take bad debts off the country's largest state-owned banks.

The problems of the firm add to dramas in a number of prominent Chinese business groups, such as debt-laden Chinese property group Evergrande, which has been declared to be in default. The story has rattled investors locally and overseas.