Huatong warns of possible default on bonds

Construction firm cites inability to make interest, principal payments

China appears to be heading for another domestic bond default after Huatong Road & Bridge Group Co, a Shanxi-based construction firm, said on Thursday it was not sure whether it would be able to pay interest or principal on a 400 million yuan ($64.5 million) one-year bond set to mature next Tuesday.

In a statement, the company blamed the payment uncertainties on an ongoing official investigation into its chief executive. A statement issued by the Shanxi Committee of the Chinese People's Political Consultative Conference said Wang Guorui, the company chairman, has been removed from his position on suspicion of law violations.