The former chairman of Zhongzhi Enterprise Group Limited (Zhongzhi Group), Mr. Gao and 49 others were recently prosecuted for allegedly illegally absorbing public deposits.
In November 2023, Zhongzhi Group issued a “Letter of Apology to Investors,” admitting severe insolvency with a debt-to-asset ratio of around 420 to 460 billion yuan. Zhongzhi Group officially defaulted.
Three days later, Zhongzhi Group and Zhongzhi Wealth, totaling over fifty people, were subjected to criminal coercive measures, including the CEO of Zhongzhi Group, Yan Maokun.
On January 5th of this year, Zhongzhi Group filed for bankruptcy liquidation with the court citing the inability to pay off maturing debts, insufficient assets to cover all debts, and a clear lack of solvency. The Chaoyang District People’s Court of Beijing accepted the bankruptcy liquidation application from Zhongzhi Group in the same month.
Public records show that Zhongzhi Enterprise Group was founded in 1995 and is a Chinese asset management company with four wealth management subsidiaries, namely Hengtian, Xinhul, Datang, and Gaosheng. Reports have indicated that the financial products managed by these four wealth companies exceed 3 trillion yuan, involving over 1 million investors.
With the frequent defaults in the mainland real estate industry in recent years, the Zhongzhi Group was also heavily impacted, unable to recover debts, facing difficulties in fund liquidity, and eventually falling into operational distress, leading to the application for bankruptcy liquidation.