Power generation equipment manufacturer Shanghai Electric listed on the Hong Kong exchange in April 2005. In May 2021, Shanghai Electric disclosed that a 40%-owned associate, Shanghai Electric Communication Technologies (SECT), was overdue on RMB8.7bn (US$1.4bn) of accounts receivable and loans of RMB7.7bn (US$1.0bn), equal to 15% of equity. It transpired that SECT had been placing orders with Shanghai Electric and other SOEs. These SOEs were then instructed to procure raw materials and supplies from companies connected to SECT's second largest shareholder. While the SOEs paid these connected suppliers in full, SECT failed to pay for the end-goods. Management at Shanghai Electric were investigated and then fined for their involvement. As such, Shanghai Electric was the victim of an embezzlement fraud.

Last updated September 2023

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