Zhongzhi Crisis Deepens: The unfolding saga involving the embattled financial conglomerate Zhongzhi has taken a concerning turn as two high-profile executives from companies under its control have gone missing. Dalian My Gym Education Technology, a prominent education firm, revealed that it has been unable to establish contact with its chairwoman, Ma Hongying.
Simultaneously, Xinjiang Tianshan Animal Husbandry Bio-engineering, specializing in breeding cattle and dairy cows, reported losing touch with its chairman, Ma Changshui. Both of these companies are affiliated with Zhongzhi, which recently admitted severe insolvency, sparking a criminal investigation by Chinese authorities.
Ma Hongying, aged 38, who has been serving as Zhongzhi’s Chief Financial Officer since 2015, was appointed as the chairwoman of Dalian My Gym Education Technology in 2022 after Zhongzhi gained control through a share purchase deal. On the other hand, Ma Changshui, aged 59, holds the position of vice president at Zhongzhi and is associated with the animal breeding firm. He previously served as the chief risk control officer of the group.
Zhongzhi, based in Beijing, oversees nearly a dozen asset and wealth management firms and is a significant player in China’s $3 trillion “shadow banking” industry, a critical source of finance outside the formal banking system. The company’s financial troubles started following the death of its founder, Xie Zhikun, in December 2021.
Also Read: Red Lobster Endless Shrimp Feast: A Bittersweet Success
Concerns escalated when a trust partially owned by Zhongzhi, Zhongrong International Trust, missed payments in August, leading to protests by investors and fears of a broader financial crisis tied to a downturn in China’s property market.
Apologizing to its investors, Zhongzhi acknowledged its severe insolvency and admitted to the exhaustion of its liquidity. The company pointed to internal management failures after the founder’s death and subsequent resignations of senior executives. Subsequently, the Beijing police initiated an investigation into Zhongzhi’s wealth management unit for suspected “illegal crimes,” implementing “mandatory criminal measures” against several suspects, including one with the surname Xie.
These developments reflect the intense pressure on business leaders in China as President Xi Jinping continues to strengthen regulatory oversight and assert control over the country’s economy. Throughout this year, numerous top executives across various sectors, including technology, finance, and real estate, have faced detention, gone missing, or become subjects of corruption probes.
Notably, the chairman and CEO of Chinese video game live-streaming platform DouYu was reported as unreachable last month, with later confirmation of his arrest by authorities. Even international consulting firms are grappling with increased risks, such as the potential for police raids and staff detentions, within the world’s second-largest economy.