It is the one of forms to start a business, which is simply business which has shares on the stock market. Hainan Airline, as a well-known airline company, plus one of the most fast-growing companies in the world. According to the investigation, it had only a thousand million invested in the early years. However, it had already expanded from thousand million (rmb) to thousand billion (rmb). From our BAT4M class, we can indicate that the amount of asset must be equal to the total of liabilities and owner's equity. What is more, it has liabilities' amount is more than the half of the amount of the total assets which is over 500 billions rmb. There is question, how can the banks trust and give the loan to this fast-growing company which is operating on borrowing? And, how can they flow the funds into the corporation under the supervision of Chinese government? As I know that Chinese government is limiting the funds that flow to outside of China.
Surprisedly, I found that some of the board of directors are relating to the older generation of the Chinese Government. Moreover, one of them was previously director of the China Construction Bank, "which is the sixth largest company in the world and one of the 'big four' banks in China". (Forbes, 2011) (retrieved from: https://www.forbes.com/global2000/) Also, I want to mention that this is the largest creditor of Hainan airline. What makes it agree to provide the loan to this company?
From my standing point, this series of deals is containing a certain amount of corruption. Plus, the money involved in this case is utterly over our imagination. I could hardly find the relevant information about this case, no matter in China or out of China. In general, Chinese citizen in China is hardly get this field of information. Furthermore, I can see that Chinese government was refused to expose these to citizen due to the debt from Hainan airline is majority directly coming from citizen. Overall, the public corporation is not that open in some reasons.
It does have corruption in the business, so the owners of companies should be more honest.
ReplyDeleteYou dare to publish the truth of the corruption which is very justice, furthermore you used what you learned in the accounting class to find out the corruption of this company,very smart.
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