SHANGHAI/HONG KONG, Aug 17 (Reuters) - Faced with a liquidity crisis, Zhongzhi Enterprise Group will conduct a debt restructuring, the Chinese asset manager has told investors, as a deepening property sector downturn raises fears about spillover risks to the broader financial sector.
Beijing-based Zhongzhi, which has sizable exposure to real estate, has stopped payment to investors in all investment products, its management told investors in a meeting on Wednesday, a video seen by Reuters showed.
Zhongzhi's financial trouble is the latest challenge for Chinese authorities as they battle to contain a worsening property sector crisis and revive a faltering recovery in the world's second-largest economy.
Zhongzhi has hired one of the Big Four accounting firms to conduct a comprehensive audit of the company, and is seeking strategic investors, its management told investors in Wednesday's meeting.
Anxious retail investors are bombarding listed companies with questions about their exposure to Zhongrong after missed payments by the trust company triggered fears of contagion across the country's financial system.
Persons:
Morgan Stanley, Zhongzhi, Lehman, Evergrande, Jason Xue, Clare Jim, Sumeet Chatterjee, Jacqueline Wong, Jamie Freed
Organizations:
Zhongzhi Enterprise, Reuters, Big, International Trust Co, Citigroup, Zhongrong International Trust, China Evergrande, HK, Energy Vehicle Group, Evergrande, Shanghai, Thomson
Locations:
SHANGHAI, HONG KONG, Beijing, Wednesday's, China, China's, Shanghai, Hong Kong