Singapore, Nov 27 (IANS): Chinese officials have launched an investigation into one of the country's biggest shadow banks, which has lent billions to real estate firms, the media reported.

Zhongzhi Enterprise Group (ZEG) has an asset management arm that at its peak reportedly handled more than a trillion yuan ($139 billion), reports the BBC.

Authorities said they are investigating "suspected illegal crimes" against the firm, in a statement.

This comes days after reports that ZEG had declared it was insolvent.

The struggling firm reportedly told investors in a letter last week that its liabilities - up to $64 billion - had outstripped its assets, now estimated at about $38 billion.

While authorities said they had taken "criminal coercive measures" against "many suspects" it's still unclear who they are, and what role they play in the firm.

The company's founder, Xie Zhikun, died of a heart attack in 2021, the BBC reported.

ZEG is a major player in China's shadow banking industry, a term for a system of lenders, brokers and other credit intermediaries who fall outside the realm of the traditional regulated banking.

Shadow banking, which is unregulated, is not subject to the same kinds of risk, liquidity and capital restrictions as traditional banks.

The latest developments at ZEG has raised concerns of further turmoil in the world's second-largest economy, after the collapse of property developer Evergrande and more recently the financial woes at Country Garden