SAWT BEIRUT INTERNATIONAL

| 3 March 2024, Sunday |

Beijing police launch investigation into troubled wealth manager Zhongzhi

According to a social media post released on Saturday by the Chaoyang Public Security Bureau, Beijing police are investigating possible crimes committed by Zhongzhi Enterprise Group, a renowned Chinese asset management.

Zhongzhi announced earlier this week that company is substantially insolvent, with up to $64 billion in liabilities, reigniting fears that China’s property debt problem is spilling over into the broader banking sector.

The firm has sizable exposure to China’s real estate sector and is a major player in China’s $3 trillion shadow banking sector – roughly the size of the French economy.

Zhongzhi did not immediately reply to an email request for comment after normal business hours on Saturday. A phone call went unanswered.

Zhongzhi apologised to its investors in a letter issued on Wednesday that said it had total liabilities of about 420 billion yuan ($58 billion) to 460 billion yuan ($64 billion), compared to estimated total assets of 200 billion yuan.

The social media post from Beijing authorities said it was looking into “many” suspects involved with the company and encouraged investors to report their losses in order to help with the ongoing investigation.

“Investors are requested to actively cooperate with the police in investigating and collecting evidence and safeguard their rights and interests through legal channels,” it read in part.

The post did not specify what crimes Zhongzhi or the individuals were suspected of having committed.

    Source:
  • Reuters