BEIJING, Nov 23 Reuters China39;s Zhongzhi Enterprise Group, a leading wealth manager, told investors it is heavily insolvent with up to 64 billion in liabilities, threatening to reignite concerns that the country39;s property debt crisis is spilling over into the broader financial sector.

The firm, which has sizable exposure to China39;s real estate sector, apologised to its investors in a letter that said it had total liabilities of about 420 billion yuan 58 billion to 460 billion yuan 64 billion.

The liabilities compared to Zhongzhi39;s estimated total assets of about 200 billion yuan, according to the letter, which was issued on Wednesday and was seen by Reuters.

Beijingbased Zhongzhi did not immediately respond to a Reuters request for comment.

The worsening woes at Zhongzhi, a major player in China39;s 3 trillion shadow banking sector roughly the size of the French economy is set to rekindle worries about contagion, though some analysts expected regulators to step in to stem a wider fallout.

China39;s highly indebted property sector has been reeling from a liquidity crunch since 2020. Defaults by developers since late 2021 have impeded economic growth and rattled global markets.

Shadow bankinglinked wealth managers in China typically operate outside many of the rules governing commercial banks and mainly channel the proceeds of wealth products sold to retail investors to real estate developers and other sectors.

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Signs of trouble at the…