(Bloomberg) — Embattled shadow banking giant Zhongzhi Enterprise Group Co. has revealed the depth of its financial difficulties, telling investors it is “severely insolvent” with a shortfall of $36.4 billion.
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The privately owned wealth manager said liquidity has dried up and the recoverable amount from asset disposals is expected to be low, according to a letter sent to investors on Wednesday seen by Bloomberg News.
Zhongzhi first triggered concern in August after one of its trust-company affiliates failed to make payments to customers on high-yield investment products. The group’s financial difficulties add to President Xi Jinping’s challenges as officials grapple with a property crisis and a weak economy.
“The government will have to step in to help, and make sure the asset disposal will be conducted in an open and fair approach,” said Sun Jianbo, founder of Beijing-based asset manager China Vision Capital, adding bad assets are typically sold…
2023-11-22 22:50:06
Source from finance.yahoo.com
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