One of China’s largest shadow banks warned it’s “severely insolvent”, with a debt pile more than two times higher than assets, according to a letter seen by Bloomberg News.
In a further sign of trouble for the nation’s $US3 trillion ($4.6 trillion) trust sector, Zhongzhi Enterprise Group told investors on Wednesday that it has debts of about 420 billion yuan to 460 billion yuan, compared with assets of 200 billion yuan. Liquidity has dried up and the recoverable amount from asset disposals is expected to be low, the company said.
