Sichuan Trust
Sichuan Trust is a non-bank financial institution, based in China.[1] It is headquartered in the southwest city of Chengdu.[2] It is one of the shadow banks in China.
Current Issues
In May 2020, Sichuan Trust disclosed about a 20 billion yuan deficit. Later, the deficit was estimated to be as much as 30 billion yuan.[1]
Sichuan Trust's financial difficulty started when the Chinese government began restricting new sales of trust products in 2020, which caused a loss of new incoming revenue from new investors so Sichuan Trust could not pay its debts.[2]
According to Diana Choyleva, chief economist at Enodo Economics, Sichuan Trust was the earliest to fail during the Chinese economic configuration.[1][3]
In 2021, police arrested Liu Canglong, Sichuan Trust's majority shareholder, who was a mining and real estate tycoon and was once the richest man in Sichuan province for embezzling trust funds.[2]
In January, several investors contacted China's National Administration of Financial Regulation to find out what assets were underlying the investments but were told that the information was a "state secret".[3]
References
- ^ a b c "What are shadow banks and why are they failing in China?". euronews. 2024-02-27. Retrieved 2024-05-09.
- ^ a b c "Elderly retirees face big losses after Chinese trust goes bust, reflecting turbulent economy". AP News. 2024-03-13. Retrieved 2024-05-09.
- ^ a b Hawkins, Amy; correspondent, Amy Hawkins Senior China (2024-02-18). "'It's legalised robbery': anger grows at China's struggling shadow banks". The Observer. ISSN 0029-7712. Retrieved 2024-05-09.
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