A rare public default at a Chinese trust company is drawing attention to cracks in the Rmb7.9tn ($1.13tn) market for the investment products in the country, where similar failures have been dealt with behind the scenes in the past.
Anxin Trust, which missed payments on Rmb11.8bn for 25 trust products earlier this year, has been forced to publicly document its default because, unlike most trusts, it is listed on the Shanghai stock exchange.
The situation has offered a rare glimpse into the factors leading up to failed trust products, which for Anxin include giving loans to an acquisitive property group that has since been delisted from a Chinese bourse. The trust company’s shares tumbled more than 9 per cent on Tuesday after it said its parent company’s shares had been frozen by a court in Shanghai.