China's SWF denies losses
CHINA - Sovereign wealth fund China Investment Corporation (CIC) has denied reports it incurred massive losses through an investment in the Reserve Primary Fund.
Reserve Primary Fund became the first money-market fund in 14 years to 'break the buck', after writing off debt issued by bankrupt Lehman Brothers.
In a statement, CIC said: "Currently CIC is a creditor, not a shareholder, of the fund. Although CIC had invested in the fund, it filed a redemption order before the fund announced the suspension of redemption; in addition the fund has confirmed in writing that CIC's investment will be redeemed at par.
"On legal advice, CIC is confident of its position with regard to the full recovery of its money."
CIC also said it was not subject to a 3% loss on principal as it filed its redemption order before the fund's suspension deadline.
It said it had been in contact with relevant parties in the US, including the Securities and Exchange Commission, to highlight the fund's promise of full repayment and CIC's legal rights.
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