China Investigates Troubled Financial Conglomerate Zhongzhi for Potential Crimes and Losses

Chinese financial conglomerate Zhongzhi is now under criminal investigation by Beijing police, suspected of committing "illegal crimes." The company recently informed investors that it is severely insolvent, with liabilities of up to 460 billion yuan ($65 billion) against assets of 200 billion yuan. Zhongzhi, which controls multiple asset and wealth management firms, has struggled with ineffective internal management since the death of its founder in 2021. The company's financial troubles are linked to its strong ties with China's real estate sector, which has been hit by a prolonged property downturn and regulatory crackdown on reckless borrowing.