The troubles besetting one of China’s biggest privately-owned financial conglomerates have deepened with Zhongzhi now at the centre of a criminal investigation.
Beijing police have begun a probe into the wealth management unit of Zhongzhi Enterprise Group, the authorities said over the weekend. The announcement comes just days after the company told investors that it is “severely insolvent.”
According to a statement posted on Saturday, police suspect Zhongzhi of “illegal crimes” and have enforced “mandatory criminal measures” against a number of suspects, including one surnamed Xie. The founder of the group, Xie Zhikun, died of a heart attack in December 2021, but his nephews hold key posts in the group, according to Chinese state media.
“Investors are requested to actively cooperate with the police in investigating and collecting evidence,” the police said, without elaborating on the crimes or the measures.
Under China’s Criminal Procedural Law, “criminal mandatory measures” can mean anything from bail pending trial or house arrest to detention or arrest.
Zhongzhi controls nearly a dozen asset and wealth management firms. On Wednesday, it told its investors in a letter that it has a “huge debt” and cannot pay all its bills. It pegged its total liabilities at up to 460 billion yuan ($65 billion), against assets of 200 billion yuan.
Source: cnn.com
