July 12, 2024

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Two executives of groups linked to troubled Chinese shadow bank go missing

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Companies linked to troubled shadow banking company Zhongzhi said they had lost contact with two executives, days after Chinese authorities said they were opening an investigation into the sprawling conglomerate.

Ma Hongying, chair of Shenzhen-listed early education provider Dalian My Gym Education Technology, and Ma Changshui, chair of Xinjiang Tianshan Animal Husbandry Bio-Engineering, could not be reached, the companies said in separate exchange filings late on Wednesday.

An investment arm of Zhongzhi owns a 30 per cent stake in My Gym, while other Zhongzhi units own a combined 24.3 per cent stake in Tianshan.

In their filings the companies said they “will pay close attention to the follow-up progress of the matter, and provide information disclosure in a timely manner”. They added the two executives did not hold stakes in their respective companies.

Their absence is the latest blow to troubled conglomerate Zhongzhi, which is at the heart of the country’s $3tn shadow banking market and has over decades built up a complicated web of investments in listed companies and the property market.

Zhongzhi has warned it faces a $36bn shortfall and in an open letter to investors admitted that it was “severely insolvent” and management “ran wild” after the death of founder Xie Zhikun.

Over the weekend, the Beijing police opened a probe into Zhongzhi’s wealth management units, accusing them of committing “crimes” and saying “mandatory criminal measures” had been placed on a number of suspects, including one surnamed Xie.

In the filings Tianshan and My Gym said they had spoken to the two executives’ family members and did not know any specific reason why they would have gone missing. My Gym and Tianshan did not immediately respond to requests for comment.

Founded in 1995, Zhongzhi expanded from timber processing to…

2023-12-01 01:33:57

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