Investors who poured billions of RMB into financial products sold by troubled Sichuan Trust are unlikely to get all of their money back after the company’s president said there may not be enough funds to repay everyone on time and a senior regulator said investigators had found evidence of embezzlement by shareholders, reported Caixin.
The firm, which has been on the radar of China’s regulators for two years because of concerns over the risks attached to the business, failed to repay the principal and interest on a trust product that matured last month. That triggered a wave of protests by investors who were called to another meeting at the company’s headquarters in Chengdu, the capital of the southwestern province of Sichuan, on Wednesday.
At stake is the repayment of billions of RMB investors put into Sichuan Trust’s “trust of trust” products, which buy trust products that have invested in a wide variety of assets, including bonds, stocks and loans to private companies and local government financing vehicles.
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