Troubled China Shadow Bank Zhongzhi Files for Bankruptcy
- Court accepted case after firm said it can’t repay debts
- Zhongzhi revealed a shortfall of $36.4 billion in November
A police car outside the building that houses the headquarters of Zhongzhi Enterprise Group Co. in Beijing on Jan. 5.
Source: Bloomberg
Chinese shadow banking giant Zhongzhi Enterprise Group Co. filed for bankruptcy, cementing the rapid downfall of a firm that oversaw more than $140 billion at its peak before succumbing to the property crisis that has wreaked havoc on the world’s second-largest economy.
Zhongzhi said it “obviously” lacked the ability to repay its debts, according to a statement Friday from Beijing’s First Intermediate People’s Court, which accepted the case. An audit found Zhongzhi’s debts were as much as 460 billion yuan ($64.3 billion), compared with assets of 200 billion yuan, according to a letter to investors in November.