SHANGHAI/BEIJING—Local government shell companies in China bought into struggling privately run listed firms for the first time last year, veering from their typical remit of financing infrastructure projects to pump over $2 billion into cash-strapped businesses.
Local government financing vehicles (LGFVs) acquired controlling or near-dominant stakes in 11 China-listed firms, showed Reuters calculations based on stock exchange filings. They also bought into a handful of small, capital-starved banks.
