A major wealth management company in China has told investors it can’t pay all its bills, reigniting fears that the country’s long-running real estate slump may be spilling over into the $3 trillion shadow banking sector.

Zhongzhi Enterprise Group (ZEG) wrote to investors on Wednesday, disclosing that it was “severely insolvent,” according to a report in Chinese state-owned news outlet lanjinger.com, citing a letter from the shadow bank, which it also published.

Reuters published a similar report, and said it had seen the letter. CNN is unable to verify the letter or its contents, and ZEG did not respond to a request for comment.

The Beijing-based company, which has significant exposure to China’s ailing property sector, said in the letter that the scale of its debt was “huge.” It pegged its total liabilities at up to 460 billion yuan ($65 billion), against assets of 200 billion yuan.

“Since the group’s assets are concentrated in debt and equity investments and have a long duration, collection is difficult, the expected recoverable amount is low, liquidity is exhausted, and asset impairment is serious,” ZEG added.

The group is one of China’s largest private conglomerates with operations in financial services, mining and electric vehicles. Concern about its finances were first triggered in August when a trust it partially owns said it had missed payments to corporate investors.

Zhongrong International Trust, which managed $87 billion worth of funds for corporate clients and wealthy individuals as of the end of 2022, is one of thousands of wealth management firms in China that offer relatively high levels of return to investors.

Analysts have estimated that the trust industry, or “shadow banking” sector, is worth $2.9 trillion, making it bigger than the French economy. Shadow banks typically provide financing through off-balance-sheet activities or via non-bank financial institutions, such as trust firms.

A mysterious and enormous part of China’s financial landscape, the “shadow banking” sector has come under the spotlight as concerns swirl about the future of the world’s second biggest economy, which is grappling with a protracted real estate crisis.

Investors in these wealth management products in China tend to overwhelmingly be middle and upper-middle class people, experts have said, and any defaults or even concerns caused by delayed payments could dampen consumer confidence,

ZEG apologized for its financial woes in the letter to investors on Wednesday, and said that since the death of its founder in 2021, and the subsequent resignations of senior executives, it had struggled with “ineffective” internal management.