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Anxin Trust's $7bn investment black hole

Once lauded as most profitable trust, its troubles now ripple though industry

Anxin had nearly 200 billion yuan under management with nearly 80 billion yuan of unpaid debts as of the end of June. (Photo by Caixin)

Shanghai-listed Anxin Trust Co. Ltd. was once lauded as China's most profitable trust company. That was before a 50 billion yuan ($7 billion) financial black hole appeared in its books, along with mounting defaults and opaque operations that have regulators seeing it as a troublemaker.

The dramatic reversal took place over less than two years, but the risks have been quietly brewing for much longer. The collapse of Anxin brought to light a dark corner of China's 20 trillion yuan ($2.8 trillion) trust industry where billions of dollars of investments were misappropriated to benefit the biggest shareholders and their affiliates.

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