HONG KONG -- China Huarong Asset Management has said it cannot estimate when it will publish its 2020 financial results and has proposed delaying its annual shareholders meeting, sparking fresh fears over the fate of the nation's biggest distressed asset manager and the risk it poses to China's financial system.

Huarong, which has more than $43 billion in bonds outstanding, said business operations were continuing as normal and it was continuing with auditors to finalize the accounts for 2020. It separately said it plans to sell its 79.6% stake in Huarong Zhongguancun Distressed Asset Exchange Center. It did not provide any other details.

The company's shares have been suspended in Hong Kong since April 1 after it failed to report results within the required time frame. It had cited the need for auditors to review an unspecified transaction.

"Given that the relevant transaction of the Company has not been finalized, neither the Company nor the Auditor is currently able to estimate the time required for completion of the 2020 Annual Results or to finalize the expected timetable for the publication," Huarong said in a statement without elaborating.

In another statement on Wednesday, it said auditors need more "information and time" and that the delay does not constitute a default.

The delay in April sparked a rout in the bonds of the company, which is majority-owned by the Ministry of Finance. It has also cast a cloud over debt issued by other large managers of bad debt -- China Cinda Asset Management, Great Wall Asset Management and China Orient Asset Management -- which, along with Huarong, have $135.7 billion in outstanding offshore and domestic bonds, according to Refinitiv.

These institutions play a key role in draining mounting bad loans from China's banking system, the world's largest by total assets.

While Huarong has so far managed to meet all bond redemptions on time, a default could rattle investors and spark a widespread sell-off in China credit. Huarong bonds were little changed on Wednesday, with those due in November 2025 quoting at around 67 cents to the dollar.

Chinese companies face $2.14 trillion of bonds maturing by 2023, 60% more than the value of bonds that came due from 2018 to 2020, according to data compiled by Refinitiv.

In the first half of 2021, 11 issuers with bonds worth 95 billion yuan ($14.7 billion) have defaulted, compared with 17 issuers and 92 billion yuan last year, according to S&P Global Ratings. However, each defaulter this year had on average three times the value of bonds outstanding compared with 2017, and nine times the amount in 2015, underscoring the looming risk.

Concerns surrounding Huarong have mounted since 2018, when then-Chairman Lai Xiaomin was arrested. He was found guilty of accepting bribes and bigamy and executed in January. Most of the asset manager's troubles stem from excesses during his term, when Huarong used easy access to cheap funding to expand into unrelated businesses.

Huarong, which is one of four big distressed debt managers set up by Chinese authorities in 1999 to help the nation's banks grapple with bad debts, had 1.73 trillion yuan in assets and 1.37 trillion yuan in interest-bearing liabilities as of June 2020.

Its core business of buying and restructuring soured loans makes up only about half of its total assets, with banking, securities trading, trusts and other investments comprising the rest of its funds under management, according to its June 2020 interim report.

Media reports previously indicated China was considering various measures to save Huarong, ranging from investment by state funds to setting up a holding company.

The China Banking and Insurance Regulatory Commission in April said that Huarong was maintaining ample liquidity and normal operations.

This month the banking regulator named Liang Qiang, an asset management veteran, to the senior post of deputy Communist Party boss at Huarong, the company said in a filing. Liang, who has served since this year as president of state-owned Great Wall Asset Management, was named president of Huarong at a board meeting on Tuesday, it said.