Provincial and municipal authorities in Zhejiang have established special task forces to address a mounting default crisis at Zhejiang Zhejin Asset Operation, reports Caixin. The licensed financial asset exchange has suspended payouts on wealth management products, stranding nearly 10,000 investors.
The crisis, involving more than RMB 20 billion ($2.8 billion) in financial products, began in late November when investors were unable to redeem matured investments or withdraw cash from their accounts. Since then, Zhejin has fully halted withdrawals.
On Monday, local media outlet Tide News reported that investigators are probing Sunriver Holding Group, the primary issuer behind the troubled products, while also overseeing Zhejin’s cooperation with the inquiry. A government team was dispatched to Sunriver on December 12 to assess the company’s assets and liabilities.