Zhang Jin, the once‑celebrated founder of Cedar Holdings, has been sentenced to life imprisonment and the forfeiture of all personal assets after a Guangzhou court found him guilty of fundraising fraud and related offences. The February 10, 2026 first‑instance verdict marks a decisive, if belated, end to a four‑year collapse that left roughly 6,800 retail investors collectively missing about RMB 20 billion.
Cedar’s rise was rapid and spectacular. From modest beginnings in the late 1990s, Zhang parlayed trading gains and property deals into an industrial conglomerate that — by the mid‑2010s — claimed operations in supply‑chain services, chemicals, tourism and real estate. The group’s reported revenue surged from RMB 59.3 billion in 2015 to more than RMB 221 billion in 2017, and Cedar entered the Fortune Global 500 in 2018. Zhang himself was briefly celebrated as Guangzhou’s richest man.
Behind the growth, however, were razor‑thin margins and extensive financial engineering. Cedar marketed “supply‑chain finance” as a core business even as the unit delivered negligible gross margins. Company filings and later court evidence show that some of Cedar’s reported sales were generated by sham contracts and transactions created to obtain bank financing and inflate revenues rather than to produce real profit.
The firm’s acquisition in 2019 of a troubled trust company — Zhongjiang Trust, later renamed Cedar International Trust — was the pivotal step that transformed the group from a trade‑heavy conglomerate into a major purveyor of wealthy‑client products. Cedar used the trust vehicle to package and sell thousands of higher‑yield wealth management products across dozens of city “wealth centres,” promising returns of 8–12% and implying state or state‑owned enterprise backing.
From 2018 onwards Cedar issued roughly 1,490 trust and wealth products, and between its affiliates raised about RMB 59.6 billion in aggregate. For a time the company used new subscriptions to service earlier commitments — classic Ponzi dynamics masked by corporate branding. Defaults began to appear in 2021; by early 2022 Cedar admitted a portion of products could not be repaid on schedule. In the end the group paid out about RMB 40 billion and left roughly RMB 20 billion unpaid.
Court documents and prosecutors’ filings outline how funds were diverted. The judgment alleges Zhang siphoned some RMB 8.4 billion into a private cache spent on gold, artwork, private aircraft and overseas property; accomplices moved funds offshore, including transfers of CHF 200,000 and USD 1.1 million, and some collaborators fled abroad. Other sums were used to cover unrelated corporate losses, including exposures to the Evergrande collapse, and to pay inflated executive salaries.
The human toll has been stark: retired teachers and small business owners who put life savings into seemingly safe, high‑yield products; company employees trapped by internal “welfare” schemes; and a broad swathe of middle‑class savers who mistook brand recognition for safety. At sentencing the court also fined Cedar Holdings about RMB 1.1 billion and handed prison terms of five to 14 years to seven senior executives.
The ruling matters beyond the headline numbers. It underscores persistent vulnerabilities in China’s non‑bank financial sector — particularly the trust and wealth management market — where scarcity of regulated licences, weak disclosure and the use of state‑linked narratives have repeatedly lured ordinary investors into opaque funding arrangements. It also demonstrates how asset pledging and priority claims by institutional creditors can leave retail holders with almost nothing: Zhang told the court that, under current asset‑realisation scenarios, retail investors would recover only about 3% of their principal.
For regulators and investors alike the Cedar saga is both familiar and instructive. It recycles the playbook seen in earlier P2P and virtual‑currency frauds: promise above‑market yields, leverage the cachet of size or official connections, obscure the true destination of funds and rely on continuous inflows to cover redemptions. The legal outcome signals a tougher enforcement posture but also highlights the limited prospects for investor recovery when corporate assets have been pledged or diverted.
The collapse leaves questions about contagion, household confidence and the policy balance between cleaning up shadow banking risks and preserving market stability. For global observers it is further evidence that China’s long effort to rein in off‑balance‑sheet credit and protect small investors will be a politically sensitive, technically difficult and drawn‑out process.