Zhongzhi, the conglomerate at the centre of China’s $3tn shadow banking market, has filed for bankruptcy, saying that it was “severely insolvent”.A Beijing court accepted a bankruptcy and liquidation application from Zhongzhi on Friday, stating that the group was unable to pay its debts.
In an open letter to investors, Zhongzhi said not only that it was “severely insolvent” but that management had “run wild” after the 2021 death of founder Xie Zhikun. It added that total assets amounted to just Rmb200bn ($28bn) against obligations of up to Rmb460bn.
Zhongzhi’s wealth management arm came under a police investigation over unidentified crimes in November, days after the group declared a shortfall of as much as $36.4bn.
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