2023-11-23 21:46:44
China Zhongzhi Group has officially exploded. The group issued a “Letter of Apology to Investors”, admitting that it is seriously insolvent and has significant ongoing operating risks. The resources that can repay debts in the short term are far lower than the overall debt of at least RMB 220 billion. Yuan.
Publish time: 23/11/2023 – 22:46
6 minutes
China Central News Agency reported that Zhongzhi Group stated on Wednesday (November 22) that on December 18, 2021, Xie Zhikun, the actual controller of Zhongzhi Group, died suddenly. Many senior executives and core personnel have stepped down or resigned. In addition, the group and its subsidiaries are highly dependent on the decisions of the former actual controller, resulting in internal management being ineffective. The group’s on-the-job personnel adjusted the organizational structure and mechanisms and took a series of self-rescue measures in an effort to reverse the operating difficulties, but “the results were not as good as expected.”
The apology letter stated that Zhongzhi Group’s related products have experienced substantial breaches of contract one after another, and it would like to express its deep apology to all investors.
The apology letter showed that after the accident, Zhongzhi Group hired an intermediary agency to conduct a comprehensive liquidation and capital verification. Preliminary investigation found that the group’s total assets had a book value of approximately 200 billion yuan. However, because the group’s assets were concentrated in debt and equity investments, they existed for a long time and were difficult to liquidate. It is difficult, the expected recoverable amount is low, liquidity is exhausted, and asset impairment is serious.
Secondly, Zhongzhi Group’s debt scale is huge. After excluding the margin, the scale of principal and interest of related liabilities is approximately 420 billion to 460 billion yuan. This also means that Zhongzhi Capital cannot repay its debts by at least 220 billion yuan.
Zhongzhi Group stated that it will clarify the historical context and have “zero tolerance” for possible behaviors that infringe on the interests of the group and investors. Once discovered and confirmed, both companies and individuals will be held accountable in accordance with the law and relevant properties will be recovered.
Zhongzhi Group also promised investors that “following the principles of marketization and rule of law, the group will strictly abide by legal regulations, actively cooperate with and urge intermediaries to further deepen the asset and capital verification work, accurately identify the specific situation of assets and debts, and transfer all the group’s assets , rights and interests, and be used to protect the rights and interests of investors fairly and equitably. All employees of the group will continue to stick to their posts, perform their duties, and do a good job in the orderly operation of existing assets. All non-performing debts should be pursued and all receivables should be collected. , protect the legitimate rights and interests of investors.”
According to the Daily Economic News, as an asset management company, Zhongzhi Group is headquartered in Beijing. It controls 10 listed companies, controls or participates in 6 licensed financial institutions, controls or participates in 5 asset management companies, and controls or participates in 4 wealth management companies. company.
After the death of founder Xie Zhikun, Zhongzhi Group was exposed to a liquidity crisis. The trigger was the failure to increase investment in real estate against the trend.
Data shows that from 2017 to 2020, Zhongrong Trust, a subsidiary of Zhongzhi Group, invested 6.61%, 10.99%, 17.65%, and 18% in real estate respectively. The housing market has been sluggish in recent years, and the “Zhongzhu Group” has not only suffered from sluggish earnings, but also encountered difficulties in liquidity.
Since August this year, a number of listed companies have disclosed risk warning announcements, “stepping on the thunder” of Zhongrong Trust’s trust products, and many individual investors’ financial products cannot be redeemed, triggering market concerns about the coming of the Chinese version of the “Lehman Storm.” However, Zhongzhi Group remained silent.
According to Blue Whale Finance, the thunder crisis of Zhongrong Trust has attracted the attention of regulatory authorities and a special risk resolution team has been launched.
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