CNAIC sales arm goes broke

The Beijing First Intermediate People’s Court declared the bankruptcy of the China National Automotive Industry Corporation (CNAIC) sales branch under the authority of the newly released Law of the Peoples Republic of China on Enterprise Bankruptcy, Ce.cn reported. 
     
According to the court, the bankrupt company, established in the planned economy and mainly serving as a service provider for CNAIC, had faced difficulties in adapting to today’s market economy. 
    
Due to its inability to function in the market economy and its growing non-performing assets and debt, the CNAIC sales arm applied to the Beijing First Intermediate People’s Court for bankruptcy. 
     
The sales branch was established under the CNAIC in 1992, with a registered capital of 55.88 million yuan (US$7.36 million). 
    
According to the accounting firm dealing with the case, as of June 30, 2007, the CNAIC sales arm had total assets of 68.03 million yuan and a total liability of 391.33 million yuan. Its asset-liability ratio of 575.21 percent, alongside substantial losses, further drove the firm towards bankruptcy.