Sichuan Trust hid what its ¥25B trust-of-trusts products held — 8,000 stopped getting paid

Sichuan Trust sold trust-of-trusts (TOT) products, pooling investor money into other trust plans rather than direct assets, and marketed roughly ¥25.3 billion of them across 45 projects to more than 8,000 investors. Regulators later found the company had not truthfully disclosed the risk in the underlying assets, had run trades unrelated to the products' stated purpose, and had let project funds be diverted by shareholders for other uses.

Payments began failing in June 2020, starting with products branded Furong and Shenfu; by the time the scale of the problem was clear, ¥129.9 billion of the total was due that year alone, with billions more maturing in 2021 and 2022. Sichuan's banking regulator suspended the TOT business and placed the company under direct on-site supervision, with accounting firm KPMG brought in to assess what the underlying assets were actually worth.

In February 2021 the China Banking and Insurance Regulatory Commission fined Sichuan Trust ¥34.9 million for 13 separate violations — at the time the largest single fine in the trust industry's history, surpassing prior records held by Ping An Trust and Anxin Trust. Only a small fraction of the defaulted products had been repaid by that point.