In the six weeks since a probe of China's top private oil company became public, government officials have kept silent about plans for the firm's far-flung empire abroad.
Analysts have been trying to piece together the puzzle of the government's policy toward Shanghai-based CEFC China Energy Company Ltd. since March 1, when independent Caixin magazine reported that its illusive founder Ye Jianming had been "placed under investigation."
Despite a series of dots connected by the regional and international press, the government has yet to make any statement regarding CEFC, leaving it unclear whether it plans to break up or bail out the U.S. $43-billion (271-billion yuan) company.
China's state media have also been mum, fueling speculation that the subject may be too hot to touch.
Questions have swirled around CEFC since last September when the little-known conglomerate struck a U.S. $9.1-billion (57.4-billion yuan) deal to acquire a 14.16-percent stake in Russia's state-controlled Rosneft oil company, buying shares from Swiss-based trader Glencore plc and the Qatar Investment Authority (QIA).
Seven months later, the deal remains unfinanced and incomplete while analysts wonder how Ye ever managed to push his way into the ranks of the world's biggest oil investors.
"It's hard for me to imagine how this guy could do this without someone giving him the signal it's okay. Can you really do that in China?" said Edward Chow, senior fellow for energy and national security at the Center for Strategic and International Studies in Washington.
On April 3, the Russian daily Vedemosti reported that CEFC had missed a March 31 deadline for a 20-percent payment of the purchase price, quoting an anonymous source saying that the due date had been extended by 10 days "or more."
Pressures have mounted in the past month with reports that Ye has stepped down from his post as CEFC chairman.
Trading has been halted in the bonds of one subsidiary, CEFC (Shanghai) International, which has been subject to lawsuits brought by state-backed China Everbright Bank, Reuters and the South China Morning Post said.
On April 2, the company's main lender, state-owned China Development Bank (CDB), urged creditors not to file more suits or recall loans in hopes of keeping CEFC afloat.
Days earlier, subsidiary CEFC Anhui International disclosed that shares representing over a fifth of its share capital had been frozen by four mainland courts.
On March 27, Bloomberg News reported that the company planned to put its entire 20-billion yuan (U.S. $3.2-billion) portfolio of international properties up for sale.
Deals no longer pending
Since then, CEFC has been hit by a series of reports of pending deals that are no longer pending and bond plans that are not going forward.
Yet, the government has had nothing to say about whether it plans to restore CEFC's finances to proceed with the Rosneft share sale, or whether it will back a state-owned buyer as a stand-in, or whether it will allow the deal to fall through completely.
Rosneft officials have been left in the dark despite inquiries made during a recent visit to China.
"The other party (CEFC) just vanished," an unidentified source told Reuters last month.
On April 3, Reuters reported that CEFC "has become a target itself by state-owned companies," without specifying a source for the information.
A rescue by one of China's national oil companies (NOCs) would further Beijing's interests, since Russia is the country's leading oil supplier.
But the option raises more questions about why the sale was not made to an NOC in the first place, and whether Russia ever checked with Chinese leaders on their support for the CEFC deal.
In a political environment where all authority is now centralized at the top, Rosneft may have merely assumed that Ye had the backing of President Xi Jinping.
"The problem that both the Russians and the Chinese have is that they tend to project that the other person's country works the same way as their country," said Chow.
Numerous reports have linked the reported Ye investigation with the arrest in New York of Patrick Ho Chi-ping on charges of bribing African officials for "valuable oil rights." Ho is a former Hong Kong home affairs secretary who headed the CEFC-affiliated China Energy Fund Committee.
But the connection between the charges in November with the investigation made public in March has yet to be confirmed.
Part of a pattern
China's silence on CEFC instead seems to fit a pattern seen in other cases involving over-reaching investment conglomerates that have come under pressure on financing without official statements before their leaders face trial.
Such was the case with Anbang Insurance Group, which was subject to regulatory pressure on its foreign real estate acquisitions as far back as 2014, four years before its chairman Wu Xiaohui was tried last month on charges of committing 65.2 billion (U.S. $10.4 billion) in fraud.
The government took control of the company in February and approved a huge cash injection of 60.8 billion yuan (U.S. $9.7 billion) from the China Insurance Security Fund on April 4 to keep repercussions from rippling through the banking sector and the economy.
Wu voiced regret and sought leniency at the close of his trial, according to a court statement on March 29.
One explanation for the government's reticence in the CEFC case is that Ye has reported ties to the Chinese military.
But like many of the legends surrounding the mysterious dealmaker, the connections to powerful interests have never been proved.
Another explanation is that officials may be reluctant to start pulling on CEFC's financial threads before they know how far they will go.
‘Three tough battles’
Controlling financial risks is one of the "three tough battles" that Xi has ordered the government to fight between now and 2020, along with poverty and pollution.
In the case of Anbang, the government charged the company with selling high-yield investment products to finance its foreign buying spree, which included pricey assets like New York's Waldorf Astoria hotel.
With regulatory crackdowns on conglomerates including Anbang and HNA Group, the government may be worried that the addition of CEFC's reported U.S. $12 billion (75.6 billion yuan) of debt could raise more uncertainty for China's financial markets.
Aside from stability concerns, another pressing question is whether the doubts will shake confidence in China's foreign investment commitments.
These have already become serious enough to spark economic concerns in the Czech Republic, where CEFC has loaded up with acquisitions including hotels, a publishing house, a soccer club and a brewery.
Last month, Czech President Milos Zeman sent a delegation to Shanghai seeking assurances that CEFC's investment commitments in the country were still good.
But days later, the report that the company's entire portfolio of properties was on the block raised doubts about the assurances Zeman received.
No matter how the CEFC deal for Rosneft shares came about, a failure to complete it could give China's international investment commitments a black eye.
"It would be a terrible embarrassment and would shake confidence in the sustainability of other Chinese investments abroad," Chow said.
"Everybody should be more and more anxious the longer the government in silent about it," he said.