Nanjing Tanker Corp., China's first state-owned enterprise which is about to lose its stock market listing following four years of consecutive losses, has been withholding information about a massive amount of debt in the form of long-term, off-balance-sheet loans drawn between 2005 and 2008, research jointly conducted by British shipping industry journal Lloyd's List and Caixin has found.
 

Some US$ 1.3 billion in loans was funneled into Nanjing Tanker by 19 banks in 11 countries to fund the Chinese carrier's fleet expansion during the shipping market boom. Commitment to the borrowing, which financed 10 very large crude carriers (VLCC) and 10 medium-range product tankers, is one of the major reasons the company is facing insolvency.

The 20 vessels and the debt obligations to them amount to non-disclosed book – a kind of shadow balance sheet – worth at least US$ 3.5billion, overwhelming the size of the company's existing balance sheet.

However, Nanjing Tanker, 55 percent owned by state giant Sinotrans & CSC Group, never made a full disclosure to the Shanghai Stock Exchange regarding the 20 off-balance-sheet transactions, all of which were priced during a rising market and contracted on terms that carry non-negotiable payment obligations and cannot be cancelled.