In a recent scandal, the Chinese private equity giant Zhongjin Capital Investment Co., Ltd. (referred to as Zhongjin Capital) has been exposed. Following the troubles of several senior figures, the current chairman of Zhongjin Capital, Shan Junbao, has also gone missing. A Mainland Chinese scholar wrote an article claiming that in the past decade, all financial scandals in China were not accidental, but rather carefully designed under a “seven-step harvesting” model, with usually three major signals before the eruption of the scandal.
According to Professor Yang Fan of China University of Political Science and Law, he stated on Weibo on November 18th, “Zhongjin has exploded, and financial scandals always have precursors.”
Yang Fan revealed that similar to the Zhongjin Capital scandal, all financial scandals in the past decade were not coincidental but part of a well-designed harvesting model. The modus operandi of these scams is remarkably consistent, resembling an assembly line operation, leading numerous individuals lacking financial knowledge and risk awareness to lose everything.
He outlined the “seven-step harvesting” model of financial institutions:
1. “Cult of Personality”: Three years before the scandal, they begin searching for a high-profile figure to serve as the face of the company – such as regulatory officials, returnee elites, or prominent children of wealthy families.
2. Extensive Marketing: Two years before the scandal erupts, they start sponsoring high-end forums, investing in advertisements on state television, or renting expensive office spaces in the financial district, even if the marketing costs triple the profits.
3. False Promises: Promising investors national strategies, exclusive resources, and “guaranteed high returns.”
4. Insider Harvesting: A year before the scandal, they force internal employees to subscribe to their financial products, compelling staff to bring in relatives and friends to meet performance targets.
5. Mass Capital Inflow: Six months before the scandal, they dramatically increase the returns, possibly shooting up to 15% or higher, with the aim of luring more unsuspecting individuals.
6. Survival by Cutting Losses: Three months before the scandal, using various reasons like system upgrades or structural optimization, they begin restricting investor withdrawals, whereas in reality, the money has already been misappropriated and transferred.
7. Shedding Skins: A month before the scandal, top executives mysteriously start to “fall ill,” “travel on business,” or “resign due to personal reasons,” while the company initiates layoffs.
Yang Fan warned that at least eight institutions are currently following these footsteps, with some companies already at the fourth or even fifth step. He advised investors to immediately flee upon encountering three dangerous signals: 1. Sudden spikes in returns of a financial product; 2. The boss flaunting luxury vehicles and properties daily; 3. Employees quietly transferring stakes, as these are signs that the institution is about to collapse, and the boss is preparing to run away.
Yang Fan disclosed that out of the 47 financial institutions that have collapsed in the past decade, 31 bosses are still at large, with 12 living abroad, 8 changing their names and starting new companies, and 11 missing without a trace. Ironically, seven bosses of failed companies have now started new financial enterprises.
The mention of “Zhongjin’s explosion” refers to the recent troubles surrounding Zhongjin Capital: according to a report from Caixin on October 30th, Shan Junbao, the current chairman of Zhongjin Capital, has been out of contact with the outside world for over a week, with no responses to calls, WeChat messages, or texts. Insiders revealed that Shan Junbao has been taken away by the authorities.
Earlier in August 2025, senior figures at Zhongjin Capital such as Ding Wei, member of the Operating Management Committee of Zhongjin Capital An Yuan, and former president of Zhongjin Capital Xiao Feng were successively investigated.
As of September 2024, Zhongjin Capital had accumulated assets under management exceeding 560 billion yuan, investing in nearly 1500 direct investment projects and owning 390 subsidiary funds.