In Depth: The Vast Funding Network Outside Vanke

China Vanke Co. Ltd., one of China’s largest real estate developers, is under renewed scrutiny following the investigation of former President Zhu Jiusheng. The probe comes at a time when Vanke is grappling with significant financial debt and complex funding structures that have resulted in some investors’ funds being tied up. Zhu, a prominent figure in Shenzhen's finance sector during his 13 years at Vanke, played a pivotal role in shaping the company’s capital operations by leveraging his dual roles at the firm and related entities[para. 1][para. 2]. Around June 2024, authorities took Zhu away for questioning, and his name has since surfaced as a central figure in investigations into off-balance-sheet activities, shadow banking practices, and allegations of possible personal gain[para. 3].

Zhu’s involvement with Vanke grew after he joined the company as a senior vice president in 2012. By 2014, he chaired Shenzhen Vanke Financial Consultants Co. Ltd., possibly using it as a conduit to control internal and external company funds. One of the notable tools in Zhu’s capital strategy was the online lending platform Penging.com, which Vanke Financial began controlling in 2016 through a 20% stake in its parent. Zhu assumed the roles of chairman and general manager of Penging.com that same year, transforming it into a key funding intermediary for Vanke. Using products on Penging.com, loans were offered to employees of major developers, including Vanke’s staff, and then invested in real estate projects—including those belonging to Vanke. These loans carried interest rates exceeding 10%, while the platform touted annualized returns above 20%[para. 4][para. 5][para. 6][para. 7][para. 8][para. 9].

Suspicions arose that senior Vanke executives may have profited by channeling project company funds to headquarters via Penging.com, enabling them to profit from the high interest rates. Since 2016, declining industry-wide returns and the property slump starting in 2021 have further worsened the outlook, leaving many projects unprofitable. As a result, some of Vanke’s projects have defaulted on principal or failed to distribute returns, putting pressure on employees to repay loans. Some affected employees have recently reported their grievances to authorities for investigation, specifically targeting Penging.com’s practices and any personal profiteering by company officials, though it remains unclear whether these reports are related to Zhu’s current investigation[para. 10][para. 11][para. 12][para. 13].

Vanke’s financial entanglements extend to Boshang Shuntai, believed to be an off-balance-sheet affiliate established by two Vanke veterans. Penging.com provided support for investment products backed by equity returns, some issued by Boshang-controlled companies and partially purchased by Vanke employees. By July 2024, some Boshang-linked products had delayed repayments, with an outstanding unpaid balance reaching about 800 million yuan ($112 million). This has led to suspicions of illegal fundraising by channeling funds raised through Penging.com products into Vanke’s projects[para. 14][para. 15][para. 16][para. 17].

Zhu also held effective control over Boshang’s asset management arm, which invested heavily in real estate projects—primarily Vanke’s—by raising substantial funds from financial institutions via partnership entities. By the end of 2024, the asset management subsidiary reportedly suffered massive losses totaling tens of billions of yuan, leading some executives to flee the Chinese mainland, while Vanke managers and executives faced travel restrictions. Authorities detained He Zhuo, the asset management firm’s former general manager, around early 2025[para. 18][para. 19][para. 20][para. 21].

Vanke’s financial woes became acute in late 2023 amid China’s ongoing property market crisis. By June 2024, its interest-bearing debt stood at 364.3 billion yuan, nearly half of which was due within a year, and off-balance-sheet liabilities exceeded 100 billion yuan. A significant leadership reshuffle ensued, with executives from Shenzhen Metro Group—Vanke’s largest shareholder—assuming key roles. Shenzhen Metro took ownership of daily operations, established a financial advisory division to address legacy issues around Penging.com and Boshang, and agreed to lend Vanke over 20 billion yuan in 2024 as part of broader rescue efforts[para. 22][para. 23][para. 24][para. 25][para. 26].