Zhongzhi, China’s troubled US$137 billion shadow bank, plans debt restructuring, hires KPMG
- Zhongzhi Enterprise Group hired KPMG in late July to review its balance sheet amid a worsening liquidity crunch, sources said
- China’s banking regulator has set up a task force to examine risks at Zhongzhi as authorities are worried about potential contagion
Zhongzhi Enterprise Group hired KPMG in late July to review its balance sheet amid a worsening liquidity crunch, said the people, asking not to be identified as the matter is private. The Beijing-based company plans to restructure debt and sell assets after the review to repay investors, the people said. The company manages more than 1 trillion yuan (US$137 billion) of assets.
It was not immediately clear how many products Zhongzhi has defaulted on and whether the company has sufficient assets to cover the shortfall if liquidated, said the people, adding that any restructuring process is likely to be lengthy. Zhongzhi has suspended payments on nearly all its products, the people said.
The Chinese firm did not respond to emails asking for comment, while calls to KPMG were not answered.
