(Bloomberg) The Chinese shadow banking giant whose liquidity crisis has fanned fears about financial contagion is planning to restructure its debt and has hired KPMG LLP to conduct an audit of its balance sheet, people familiar with the matter said.Most Read from BloombergFed Saw ‘Significant’ Inflation Risk That May Merit More HikesGoldman CEO’s Most Loyal Deputy Is Tested by Mutinous PartnersChina Shadow Bank Misses Dozens of Payments as Risks GrowHigh-Potency Pot Market Worth Billions Draw
A liquidity crisis at one of China's top asset managers Zhongzhi Enterprise Group has fuelled worries that the country's deepening property sector crisis is spilling over into its $57 trillion financial industry, even as the economy is weakening. The group will conduct a debt restructuring, investors sources told Reuters after being briefed by management, a video seen by Reuters showed, after a trust firm controlled by the group missed payments on dozens of investment products. Zhongzhi's trouble has raised worries of a contagion risk to the financial sector if other trust firms default on repayment obligations in the $3-trillion shadow banking industry, which traditionally has had high exposure to the property industry, which is in a deepening slump.
The Chinese shadow banking giant whose liquidity crisis has fanned fears about financial contagion is planning to restructure its debt and has hired KPMG to conduct an audit of its balance sheet, sources said.
China s banking regulator has established a task force to examine risks at wealth management group Zhongzhi Enterprise, after several of its corporate clients disclosed overdue payments by a trust unit. Zhongzhi is one of the largest players in China s $2.9tn trust industry, which manages pools of savings from wealthy households and corporate clients to provide loans and to invest in such assets as real estate, commodities, bonds and shares.