A $3 billion redemption crisis in eastern China is reviving concerns about the loosely-regulated shadow-banking industry as the nation’s prolonged property slump risks spilling over into the financial sector.
Investors holding some 20 billion yuan ($2.8 billion) in wealth management products sold through Hangzhou-based Zhejiang Zhejin Asset Operation Co. failed to receive payments due in late November, according to people familiar with the matter. The products’ underlying assets were debt claims of property developers affiliated with Sunriver Holding Group Co., documents seen by Bloomberg News show.