Criminal Charges Handed to 49 Zhongzhi Employees after Dramatic Downfall

00:00

00:00/00:00

Listen to this article 1x

Zhongzhi raised enormous sums through its wealth management units and invested the money in an array of listed companie

Forty-nine former employees of the private conglomerate Zhongzhi Enterprise Group Co. Ltd. are facing criminal charges for illegally absorbing public deposits, after the dramatic collapse of the shadow banking giant, which left a capital shortfall of up to $36.4 billion.

Prosecutors in Beijing have charged 49 individuals connected to Zhongzhi, including chairman Gao Xingshan, after a public security department investigation, the People’s Procuratorate of Beijing Municipality said in a statement on Friday.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

Forty-nine former executives of Zhongzhi Enterprise Group, including chairman Gao Xingshan, are charged in Beijing for illegally absorbing public deposits, with penalties possibly up to life imprisonment.
Zhongzhi, with nearly 1,500 subsidiaries and managing almost 1 trillion yuan in assets, faced a $59-$64.1 billion debt, leading to bankruptcy liquidation and a criminal investigation.
Founded in 1995 by Xie Zhikun, Zhongzhi shifted focus to finance in 2008 but struggled with aggressive expansions, regulatory tightening, and a real estate downturn.

AI generated, for reference only

Who’s Who

Zhongzhi Enterprise Group Co. Ltd.: Zhongzhi Enterprise Group Co. Ltd. is a Beijing-based private conglomerate founded in 1995 by Xie Zhikun. Once one of China’s largest private wealth managers, Zhongzhi managed a diverse portfolio with nearly 1,500 subsidiaries. The company expanded aggressively into finance but faced financial deterioration due to tightening regulations and the property industry downturn. Zhongzhi filed for bankruptcy liquidation in January 2023, revealing debts between $59 billion and $64.1 billion, more than twice its assets.

AI generated, for reference only

What Happened When

June 2023：: Several wealth management and trust business affiliates of Zhongzhi Enterprise Group Co. Ltd. failed to repay investors.

November 2023：: Zhongzhi disclosed in a letter to investors that it had debts ranging from 420 billion yuan to 460 billion yuan, more than twice its assets of 200 billion yuan.

Late November 2023：: Authorities opened a criminal investigation into the money management business of Zhongzhi and took measures against several of the company’s executives and its subsidiaries.

January 2024：: Zhongzhi filed for bankruptcy liquidation.

June 2024：: A request for a consolidated bankruptcy liquidation was filed to a court in Beijing by Zhongzhi’s bankruptcy administrator, Beijing Dacheng Law Offices.

Friday, August 9, 2024：: Prosecutors in Beijing charged 49 individuals connected to Zhongzhi, including chairman Gao Xingshan, after a public security department investigation.

AI generated, for reference only