(Yicai Global) March 11 -- China Chengxin International Credit Rating, the country’s largest credit ratings company, was criticized by the National Association of Financial Market Institutional Investors yesterday because of the high rate of defaults among its corporate clients last year. 

Chengxin International performed worst among 13 domestic ratings agencies with seven of its clients among the 23 bond issuers to default in 2020, according to statistics released by the NAFMII yesterday. 

The association said there were various problems with Chengxin International, including not implementing field work and interviews per self-regulation rules and not effectively disclosing information relevant to credit risks. 

Chengxin International is the fourth-largest credit ratings firm in the world. It is licensed to make credit ratings in the inter-bank market, exchange market and overseas markets, according to the Beijing-based company’s website. Global ratings giant Moody’s Investors Service owns 30 percent of Chengxin. 

The number of defaults among companies given a high AAA rating by Chengxin reached 0.45 percent last year, the data showed.

Golden Credit Rating and Dagong Global Credit Rating were also criticized for failing to implement strict regulations on quality control and for having weak mechanisms regarding reviews and feedback. 

The NAFMII carried out on-site investigations into the three firms, conducted spot checks on some projects and materials and interviewed employees in the fourth quarter of last year. 

The association also warned Golden Credit Rating and Chengxin about violations of self-regulation rules and those covering the inter-bank market. It suspended their bond financing businesses for three months and ordered them to conduct in-depth and comprehensive rectification. 

Editor: Tom Litting