(Yicai Global) May 8 -- Zhang Jin, founder and actual controller of Cedar Holdings, who was once among China’s richest people with CNY40 billion (USD5.8 billion) in assets, has been taken into custody by police, with his company suspected of illegally absorbing deposits from the public, Securities Times reported today.

The Guangzhou Municipal Public Security Bureau announced yesterday that it has taken criminal coercive measures against a person surnamed Zhang. The person is Zhang Jin, according to the report, which cited a source familiar with the matter.

Since January 2020, under the guarantee of Cedar, several companies, including its Guangdong Yuanfang Investment, have sold more than 350 illegal wealth management products, with a total scale of over CNY20 billion, to natural persons, the report said.

The redemption of such products fell into comprehensive stagnation in February 2022. For more than a year since, the Guangzhou police have been investigating Cedar’s suspected illegal fundraising.

Headquartered in Guangzhou, Cedar was founded in 1997. It owns Cedar International Trust, Dalian Financial Assets Exchange, and listed companies Cedar Development and Zibo Qixiang Tengda Chemical.

Chen Hui, a director of Qixiang Tengda, has been missing since last October and his disappearance is likely linked to fundraising worth over CNY7 billion, Yicai Global learned from a source close to the authorities.

Editor: Peter Thomas