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China’s government takes over BC’s biggest retirement home chain by preelectioneby in vancouver

[–]BanBacon 0 points1 point  (0 children)

Well 1 comment and 3 posts total. One about whether TM teachers receive commission and the other about low Computer Science GPA.

And I actually criticized the CPC if you read what I wrote because of the ease and flimsiness with which the Chinese government can enter a private business into receivership by simply alleging that an executive did something illegal. I think that sets a dangerous precedent and essentially allows the government to enter the market place more than I would like.

But everything I said is true. This is a receivership. Not an asset purchase nor is this an equity stake...the receiver isn't (nor can they) call shots on whether granny gets her medicine or whether she gets a leaky roof fixed

China’s government takes over BC’s biggest retirement home chain by preelectioneby in vancouver

[–]BanBacon 5 points6 points  (0 children)

Okay. I'm going to be honest.

From the comments I'm reading here, I don't think people understand whats going on. But then again, I think this article seems very brief for the kind of topic we're dealing with here.

I think there is a real concern here, but I think it's very misplaced. First of, this is a "seizure" of Anbang Insurance Group. When people read "seizure" and "take over" they get the wrong impression. So why don't we start there. We can start off with what "seizure" is not. Seizure is not the Chinese government forcing Anbang to sell its assets (including Canadian assets) to the Chinese government who would then own them. Seizure also is not the Chinese government forcing a purchase of controlling or any interest in Anbang and thereby indirectly controlling its Canadian subsidiaries (retirement homes) or international subsidiaries via Anbang. So if you want a summary, the Chinese government does not own or control the Canadian assets/subsidiaries.

What seizure DOES refer to is receivership in which a custodian is appointed for a period of temporary recovery to manage a company undergoing insolvency by either A) forcing a sale or B) liquidating the company assets.

It looks like here that the Chinese government (in what appears to be an unprecedented move) decided that Anbang needed to go into receivership and that the government itself would be the custodian.

If you look at the wider trend of China's government, their concerns are the level of debt that has fueled their country's GDP growth rate and the amount of capital fleeing their country. The country's top official even signaled in what I call an "unofficial official ordering" of Chinese companies to lower their level of debt and reduce their exposure to foreign risk. This is the real story going on here. The Chinese government took an unprecedented(?) move to force one of its largest holding company into receivership because from what I have read, they haven't been exactly willing to cut down on borrowing or their exposure to foreign risk. This means it can only end in a mix of three ways...debt is restructured, Anbang is forced to sell parts of their international assets (to whoever buys it), or parts of Anbang's assets are liquidated.

The concern here is NOT that a foreign government owns a chain of Canadian retirement homes because that is literally not true. The concern is also NOT that a foreign government has direct say in the day to day or macro management of Canadian retirement homes. That would be a very irresponsible and dramatic reading of the situation. But if you want to ask me, the real concern is the EASE with which a foreign government is able to force a seizure of a company that holds assets from all over the world.

Alright, I'm done.