FINANCE

China Jails Former Zhongzhi Executives in Landmark Shadow Banking Ruling

Published: Dec. 23, 2025 3:55 p.m. GMT+8

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A Beijing court on Tuesday sentenced former Zhongzhi Enterprise Group Chairman Gao Xingshan and other executives to prison terms of up to 14 years, marking a major judicial milestone in the collapse of one of China’s largest shadow banking conglomerates.

The ruling underscores Beijing’s broader campaign to rein in risks in the shadow banking sector, following the unraveling of Zhongzhi, once a financial empire that sold high-yield investment products to retail investors.

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Former Zhongzhi Enterprise Group Chairman Gao Xingshan and other executives were sentenced to up to 14 years in prison for illegal deposit-taking.
Zhongzhi, one of China’s largest shadow banks, collapsed amid regulatory tightening and liquidity issues.
Authorities continue recovering assets to reduce investor losses as Beijing increases scrutiny of shadow banking.

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Who’s Who

Zhongzhi Enterprise Group: Zhongzhi Enterprise Group was a major Chinese shadow banking conglomerate founded in 1995 by Xie Zhikun. It aggressively expanded into wealth management, selling high-yield investment products. The group collapsed due to tightening regulations and liquidity strains. Its former chairman, Gao Xingshan, along with other executives, received prison sentences for illegally absorbing public deposits, highlighting China's efforts to control risks in the shadow banking sector.

Zhongrong International Trust: Zhongrong International Trust was a key affiliate of the Zhongzhi Enterprise Group, a shadow banking conglomerate. Gao Xingshan, a former Zhongzhi chairman and close aide to the group's founder, previously held senior roles at Zhongrong International Trust. This trust played a part in the group's aggressive expansion into wealth management and shadow banking activities, which later unraveled due to tightening regulations and liquidity issues.

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