Boss of Shanghai wealth management firm vanishes

Many banks and private investors have been in a limbo since the head of a licensed Shanghai wealth management firm disappeared early last week.

Zhu Yidong, chairman of the Fuxing Group (FX Group), which owns Yilong Wealth Management, has been missing since June 26, according to local media. His family denies knowing his whereabouts.

Yidong was meant to make interest payments on the loans for which he had pledged stock as collateral on June 20, a few days before he disappeared, according to Beijing-based news website Caixin.

However, Yidong had suffered from a cash crunch since January following a report from state broadcaster China Central Television that revelead FX Group had inflated the stock price of a company controlled by his father.

The report had not only affected Yidong’s reputation, but also reduced his ability to raise money.

The disappearance has left several major banks that invested in Fuxing Group in the dark. This includes the Bank of Beijing, Hengfeng Bank, SPD Bank, as well as different trust companies.

FX Group’s businesses extended across several sectors, including finance, rare minerals, health care, trade and the media, according to its website. The group managed assets worth above 35 billion yuan ($5.26 billion) in 2017, with trade volume topping 30 billion yuan.

ABOUT THE AUTHOR
Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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