Weekend Long Read: Why Did It Take So Long to Act on the Zhongzhi Meltdown?

On Nov. 25, authorities opened a criminal investigation into the money management business of Zhongzhi Enterprise Group Co. Ltd. It begged the question: What took them so long?

The sprawling financial conglomerate had raised enormous sums of money through its wealth management companies and invested the funds in a vast array of listed companies and other projects. But over the past few years, loss-making investments amid a stock market downturn, tightened regulations and a property market slump have crashed the de facto shadow bank’s balance sheet, leaving its units unable to repay investors.