Goldman Sachs suspended work for an affiliate of Chinese conglomerate HNA that has been under increased scrutiny by the Chinese government, a person familiar with the situation said Wednesday.

The US investment bank had been enlisted in August to manage a stock offering of HNA outsourcing business Pactera. But Goldman Sachs concluded the financial structure of the Pactera business was too opaque to allow it to proceed with the work, the person said.

The move comes as the Chinese government stiffens requirements on overseas investment by HNA and other large Chinese companies with prominent foreign holdings.

Beijing has been cracking down on the deals due to worries about high debt levels and capital outflows.

HNA holds stakes in the Hilton hotel chain, Deutsche Bank and in the financial firm sold by former White House aide Anthony Scaramucci.

It has spent more than $45 billion since 2015, but has faced higher interest rates as it has taken on more debt, according to Bloomberg News.

HNA acquired Beijing-based Pactera for $675 million in 2016 from Blackstone.

Goldman informed Pactera, as well as investors it had contacted in connection with the financing round, of its decision to suspend work on the offering, the person said

Goldman Sachs did not break off all business with HNA, but plans to assess work on a case-by-case basis, the person said.

Over the summer, Bank of America also moved to avoid working for HNA because of questions about its business structure.

Other large Chinese companies Wanda, Fosun and Anbang, also have faced increased scrutiny Chinese regulators over concerns they were racking up dangerous debt levels for sometimes flashy foreign investments.

Source: AFP