(Yicai Global) Sept. 4 -- Two banks have frozen USD37.4 million (CNY245 million) in asset funds held by Jiangsu Protruly Vision Technology Group Co. [SHA:600074], China's largest maker of vision products, such as car safety cameras and military night vision, for the non-repayment of loans.
Protruly and subsidiaries applied for USD22.9 million of credit from the Hong Kong and Shanghai Banking Corp Ltd.'s (HSBC) [ LON:HSBA ] Shenzhen office on April 13, and still owes roughly USD11 million.
The HSBC branch has therefore frozen USD11.1 million that Protruly raised from non-public fundraising and deposited at Ping An Bank Co.'s [SHE:000001] Shenzhen branch, claiming "it has the right to ask the borrower to repay the loan at any time."
Ping An Bank then froze Protruly funds worth USD26.41 million as well as two properties located in the city, for reasons related to self-risk control.
The company did not rule out other cooperative banks taking the same measures, including requiring the company to repay loans in advance and freezing funds and assets. These measures may affect the firm's capital chain and normal operations, Protruly said.
HSBC's unilateral freezing of capital and withdrawals of loans have damaged the company's interests significantly, the firm said. Protruly wants to bring a case before a Shenzhen court relating to disrespecting of agreements and breaking the financial market order.