(Yicai) Feb. 17 -- China's Ministry of Finance has transferred the ownership of China's three biggest state-owned bad debt managers to a subsidiary of sovereign wealth fund China Investment Corporation.

The MOF transferred its 58 percent stake in China Cinda Asset Management, 71.6 percent stake in China Orient Asset Management, and 73.5 percent in China Great Wall Asset Management to Central Huijin Investment, the three asset management companies announced on Feb. 14.

Xinhua Finance News reported in January last year that China intended to incorporate three of its four so-called 'bad banks' into CIC in the near future. Before that, the fourth one -- China Huarong Asset Management -- changed its name to China Citic Financial Asset Management after becoming a subsidiary of state-owned conglomerate Citic Group.

This equity adjustment is part of China's latest financial institutional reform plan that aims to better separate companies' shareholder and regulator roles while exerting a minimal impact on their business operations, industry insiders told Yicai.

According to a plan on reforming Party and state institutions issued by the State Council in March 2023, China's goal was to fully divest market-oriented institutions managed by central financial departments and transfer their state-owned financial assets to state-owned financial capital trustee institutions.

The four bad debt managers were set up in 1999 to dispose of non-performing assets at state-owned lenders Agricultural Bank of China, Bank of China, China Construction Bank, and Industrial and Commercial Bank of China and have developed into financial holding firms with multiple related licenses.

Founded in 2007, CIC is one of the world's largest sovereign wealth funds and is charged with investing China's foreign exchange reserves within an acceptable risk range. It is directly controlled by the State Councils.

Central Huijin mainly invests in key state-owned financial enterprises, exercising shareholder rights and fulfilling shareholder obligations for them. As of June 30, last year, it held direct stakes in 19 financial institutions, including banks, insurance companies, securities firms, and comprehensive financial institutions.

Editor: Futura Costaglione