(Yicai) Sept. 9 -- Nearly seven months after the official announcement, China's Ministry of Finance has completed the ownership transfer of the country's three biggest state-owned bad debt managers to a subsidiary of sovereign wealth fund China Investment Corporation.

The ministry has transferred its entire 58 percent stake in China Cinda Asset Management to Central Huijin Investment, the Beijing-based asset management company announced on Sept. 4.

The two others -- China Great Wall Asset Management and China Orient Asset Management -- announced in April and June, respectively, the transfer of the ministry’s 73.5 percent and 71.6 percent stakes in them to Central Huijin.

Xinhua Finance News reported in January last year that China intended to incorporate three of its four so-called 'bad banks' into CIC in the near future. Before that, the fourth -- China Huarong Asset Management -- changed its name to China Citic Financial Asset Management after becoming a unit of state-owned conglomerate Citic Group.

The move is part of broader financial institutional reforms to better separate state-owned company shareholders’ regulatory roles while exerting a minimal impact on their business operations, industry insiders told Yicai. Under a plan to reform Party and state institutions issued by the cabinet in March 2023, the goal is to fully divest market-oriented institutions owned by government agencies and transfer the state-owned financial assets to state financial capital trustees.

The four bad debt managers were set up in 1999 to dispose of non-performing assets at state-owned lenders Agricultural Bank of China, Bank of China, China Construction Bank, and Industrial and Commercial Bank of China, and have developed into financial holding firms with multiple related licenses.

Founded in 2007, CIC is one of the world's largest sovereign wealth funds and is charged with investing China's foreign exchange reserves. It is directly controlled by the cabinet, or State Council.

Central Huijin mainly invests in key state-owned financial enterprises, exercising shareholder rights and fulfilling shareholder obligations for them. As of the end of June last year, it had direct stakes in 19 financial institutions, including banks, insurers, brokers, and across-the-board financial institutions.

Editors: Tang Shihua, Futura Costaglione