Zhu Yidong, chairman of the Fuxing Group, which owns Yilong Wealth Management, has not been seen since 26 June.
Zhu’s disappearance coincides with another Fuxing Group-owned business, peer-to-peer (P2P) lending platform Yilongcaifu, having reportedly collapsed.
Yilongcaifu’s woes follow a string a P2P lending firms collapsing in China in recent years, including Ezubao, which cheated 900,000 investors.
According to a report by Beijing-based news website Caixin, police have sealed off Yilong Wealth Management’s downtown-Shanghai headquarters.
While local English language newspaper Global Times reports Fuxing Group, which is believed to have RMB35bn (£4bn, $5.3bn, €4.5bn) in assets under management, and Yilongcaifu’s offices have also been shut down and are under investigation by the police.
The disappearance of Zhu has left several major banks that invested in Fuxing Group in the lurch. This includes the Bank of Beijing, Hengfeng Bank, SPD Bank, as well as several trust companies, according to Caixin.
Reputation damaged
It is understood that in January the state broadcaster, China Central Television, accused Fuxing Group of inflating the stock price of a company controlled by Zhu’s father.
Reports say the accusation had brought Zhu’s reputation into question and had reduced Yilong’s ability to raise money.
Further, Caixin says Zhu had recently skipped debt repayment deadlines, where he had used shares in several listed companies as collateral.
