Hefei Xingtai Financial Holding Group: Risk Management

內容大綱
On May 8, 2012, the president of Hefei Xingtai Financial Holding Group (Xingtai) received a message from a senior officer of the Hefei Municipal Government, the company’s authorizing body, asking that Xingtai provide financial support to PanTeng Company (PanTeng), a solar power manufacturing company. In order to survive, PanTeng needed Xingtai to provide a guarantee for a ¥100 million business loan from a commercial bank. PanTeng had already been turned down by Xingtai Financing Guaranty, one of Xingtai’s subsidiaries, because of the potentially high level of guarantee risk. If Xingtai provided a guarantee, it could be liable to reimburse the loan due to PanTeng’s high-risk operation, lose its risk management expertise, and face further violations. However, denying the senior officer’s request would hamper Xingtai’s important relationship with the local government. Should Xingtai take a chance and approve the loan, or should it deny the guarantee?
學習目標
This case discusses corporate risk management, strategic management, and management control. This case is suitable for related MBA and EMBA courses, and other graduate programs in the business management field. After completion of the case, students should be able to:<ul><li>Understand the importance of corporate risk management and the role of risk communication.</li><li>Illustrate the influence of a company–government relationship on corporate risk management.</li><li>Develop the corporate risk management framework for a parent and its subsidiary financial company.</li><ul>
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