A unit of Citic Group and CCB Trust, which is backed by China Construction Bank have been asked to examine the books of Zhongrong International Trust Co.
This could be the precursor to a state-led rescue of the shadow lender.
The background to this is the woes at Zhongrong:
- China's Zhongrong misses dozens of payments as fallout spreads
- China concerns continue to linger in the market
Chinese policymakers are becoming increasingly concerned about the $2.9tln trust sector's influence on financial stability. Zhongrong and its affiliated Zhongzhi Enterprise Group halted payments on numerous investment products to wealthy individuals and companies earlier this month.
