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Reserve Contradicts CIC’s Claim

10-17 13:47 Caijing Magazine

CIC is not guaranteed to receive the full principal on its investment in the Reserve’s Primary Fund, according to a recent Reserve press release.

 

By staff reporter Li Qing

 

China Investment Corp.’s (CIC) subsidiary Stable Investment Corp. will not receive funds prior to other investors in the Primary Fund, according to an October 15 press release from the Primary Fund’s managing company, the Reserve.

 

The Reserve’s press release was a response to a recent announcement from CIC that claimed the company had filed a redemption order before the Primary Fund announced a suspension of redemption.

 

Contrary to CIC’s claim, the Reserve’s cash manager said CIC will receive its share of the Primary Fund’s distributed assets in accordance with the final plan of liquidation. The company is not guaranteed the primary in full on its investment, as CIC had claimed.

 

Beginning October 15, the Reserve has used its website to release information on the cash position of each of its funds.

 

The Primary Fund is a money market mutual fund. The cash position in the fund has grown to about US$ 25 billion at present, representing about 40 percent of the outstanding balance.

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