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, requesting that Xingtai supply financial support to PanTeng Company (PanTeng), a solar power manufacturing company.
Xingtai Financing Guaranty, one of Xingtai's subsidiary companies, due to the possibly high level of guarantee threat had already turned down PanTeng. If a guarantee was provided by Xingtai, it might be liable to reimburse the loan due to PanTeng's high-risk operation, lose its risk management expertise, and confront additional infractions. However, denying the senior officer's request would hamper the important relationship together with the local government in Xingtai. Should Xingtai take the opportunity and endorse the loan, or it must refuse the guarantee? Jiuchang Wei is affiliated with University of Science and Technology China. Lei Zhou is affiliated with University of Science and Technology.
PUBLICATION DATE: January 14, 2016 PRODUCT #: W16008-HCB-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
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