(Yicai Global) Dec 26 -- China Banking Regulatory Commission will strictly sanction banks involved in Cosun Group's default, after China Guangfa Bank Co., which is primarily liable in this case, suffered imposition of a CNY720 million (USD110 million) fine.

A joint-stock bank and another large nationwide depository institution will also face penalties of up to the amount of China Guangfa Bank's, while other smaller financial institutions are likewise involved, as 21st Century Business Herald reported.

The case started in 2014 when two Cosun Group units issued two-year private bonds with principal and interest totaling CNY1.15 billion backed by China Guangfa Bank's performance guarantee.

Cosun Group could not pay the mature bonds. CBRC's investigation uncovered such illegalities as collusive acts, forged company seals and illicit guarantees, and the regulator levied the fine on Dec. 8.