(Yicai Global) July 19 -- In response to the report on the comprehensive risk investigation of China's financial institutions of the funds of Sunac China Holdings Ltd. [HKG:1918] published by sina.com, chairman Sun Hongbin said July 18 such investigations are normal, adding Sunac China's cash flow is under no pressure.

China's financial institutions carried out a comprehensive risk investigation of Sunac China's funds, and stopped it from borrowing USD225 million (CNY1.5 billion) in trust loans, media reported. Several banks began their investigation after Sunac China plied investment transactions with Dalian Wanda Commercial Properties Co. [HK:3699]. This is routine, Sun argued. "Many banks are in contact with us and Wanda, as well as Wanda's 13 cultural tourism projects. It's abnormal for banks to pay us no attention at all."

The purchase of Wanda's land, hotels and projects for CNY63.2 billion has put little pressure on Sunac China's cash flow, he claimed, and the banks have expressed their understanding and support. By June 30, CNY90 billion cash was still in the company account, with almost CNY50 billion available for use. The company logged sales revenue of CNY28.5 billion last month, and expects more than CNY20 billion this month, and over CNY30 billion after next month. Further, since the firm has essentially stopped buying land in the open market as of Oct. 1, transactions with Wanda exert no pressure on cash flow, Sun said.

Wanda signed the agreement to transfer its hotels and cultural tourism towns to Sunac China on July 10. Wanda transferred 91 percent of stock rights in its 13 cultural tourism projects to Sunac China at 91 percent of the registered capital, i.e. CNY29.6 trillion, and Sunac China took over all existing loans for these projects. In addition, Sunac Real Estate Group Co. purchased 76 Wanda hotels for CNY33.6 billion, including Wanda Realm Beijing and Wanda Realm Wuhan.

Two of the top three international rating agencies have lowered their corporate credit ratings for the company lately. "It was ludicrous for them to lower their ratings for Sunac China. They haven't come to learn about our projects or buy our houses. How come they give us ratings? Anyway, their ratings have little effect on us, except somewhat on bond issues," Sun fumed in reply.