Zhongrong International Trust Co. missed payments on dozens of products and has no immediate plan to make clients whole, indicating troubles at the embattled Chinese shadow bank are deeper than previously known.

Wang Qiang, board secretary of the firm partly owned by financial giant Zhongzhi Enterprise Group Co., told investors in a meeting earlier this week that the firm missed payments on a batch of products on Aug. 8, adding to delays on at least 10 others since late July, according people familiar with the matter. At least 30 products are now overdue and Zhongrong also halted redemptions on some short-term instruments, one of the people said.

The company doesn’t have an immediate plan to cover the payments since its short-term liquidity has suddenly dried up, Wang said. He added that the number of products with missed payments has risen and the company is facing a “tsunami” of questions from investors and their own wealth managers, according to the people familiar, who asked not to be identified because the meeting was private. Wang asked for patience as the firm seeks to recoup the value of its investments.

The increased delays signal that the troubles at Zhongzhi, which manages $138 billion, are deeper than initially thought as only three clients so far have publicly revealed missing payments by the two firms. Chinese authorities have already set up a task force to study any possible contagion, with the banking regulator examining risks at Zhongzhi, people familiar with the matter said earlier.

Zhongrong didn’t respond to requests for a comment.

The liquidity challenges underscore how troubles in the property sector, and China’s weakening economy, are now spreading deeper into to the financial sector. Many trust products are backed by real estate projects run by troubled developers such as China Evergrande Group.

Zhongrong is among the biggest firms in the country’s $2.9 trillion trust industry, which pools savings from wealthy households and corporate clients to make loans and invest in real estate, stocks, bonds and commodities. The firm has 270 high-yield products totaling 39.5 billion yuan ($5.4 billion) due this year, according to data provider Use Trust.

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Wang dismissed online rumors that it has stopped making payments on all its products.

Liquidity has dried up “unexpectedly,” making it hard to meet short-term debt obligations as most of the underlying assets are long-term and illiquid, he said. The products bear some resemblance to a “funding pool,” he said, referring to a previously widespread practice where proceeds from new products are used to pay other investors. This method was banned by regulators a few years ago.

Zhongrong is now seeking to limit the fallout from the defaults and ensure the stability of its operations, which can in turn help with repayments, Wang said.

Zhongzhi is among private wealth managers that Beijing has been trying to rein in for years to minimize risks for the hundreds of thousands of retail clients who buy these products assuming they’re safe. China is already struggling with a weak economy and fallout from the property slump that’s threatening to push giants like Country Garden Holdings Co. into default. The central bank on Tuesday cut interest rates by the most in three years in a bid to revive growth.

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According to Bloomberg Economics, the trust sector’s exposure to real estate is about 2.2 trillion yuan, or 10% of total assets as of the end of 2022. Zhongrong is the ninth-biggest trust, with about 600 billion yuan in assets.

“The big danger is that a negative feedback loop kicks in, with property stress causing strains in the financial system, undermining credit expansion and depressing growth, which, in turn, exacerbates the slump in the property sector,” Bloomberg Economics said in a note.