The biggest risk for ordinary people is not a lack of effort, but not understanding how money truly flows in this world.

How did the once-reputed Vanke manipulate capital operations to play with your hard-earned money?
A company that lost 130 billion yuan in two years is being consumed by its own shadow. This is not a metaphor but a fact under judicial investigation. Vanke's former CEO, Zhu Jiusheng, was subjected to criminal enforcement measures last year. The offshore capital empire he built is being torn apart layer by layer. Even more chilling is that this secret system has been operating for nearly 10 years, with no apparent flaws on the books.
You might think Vanke lost so much money because the real estate market is no longer viable. That’s partly true—homes are indeed harder to sell—but the 130 billion yuan didn’t just evaporate or all get lost on the ground. A significant portion was siphoned out through an invisible channel within Vanke, known in the industry as the Shadow. Essentially, Vanke means establishing a parallel capital system outside its listed company, with its own companies, funds, and lending operations. On the surface, it has no equity ties to Vanke, but in reality, it’s managed entirely by Vanke’s core executives. You can think of it as a legitimate front—Vanke as the restaurant’s front desk, and the shadow system as the back kitchen or casino. Customers see the dishes being cooked, but the owner profits from the gambling.
How does this system operate?
In simple terms, it involves three steps.
First, setting up a bunch of companies outside Vanke, with two key ones: Pengjinso and Bosang Asset Management. Pengjinso is an online financial platform, in which Vanke invested 300 million yuan as the largest shareholder. Bosang Asset Management has a registered capital of only 100 million yuan, but it later mobilized funds reaching hundreds of billions. These two companies are registered separately from Vanke, but in practice, all are controlled by Vanke’s top executives. Zhu Jiusheng himself once served as chairman and general manager of Pengjinso.
Second, using these offshore companies to arbitrage interest spreads. How? Vanke cooperates with smaller developers to develop projects. The partners need funding. Normally, they could get bank loans, but Vanke doesn’t allow that. Instead, Vanke first diverts the project’s sales proceeds back to the partner’s account, leaving them with no funds, then guides them to borrow from shadow companies like Beijing Wapeng and Red Rise. The key point: much of the borrowed money is actually diverted from the partner’s own project sales funds. In other words, Vanke lends money to its partners using their own funds, charging annual interest rates of 18% to 24%. It’s like being a partner in a restaurant, where the owner secretly takes your invested money and then lends it back to you at high interest—repaying principal and interest as usual. The interest is recorded as a cost within Vanke’s group, but as income in the shadow companies. This black under the lamp is the most insidious.
Third, sharing profits through a co-investment mechanism. Since 2014, Vanke has implemented a project co-investment system, claiming to share risks and benefits with employees. It sounds ideal, but in practice, many employees have no extra funds to co-invest and are instead guided to borrow money on Pengjinso’s platform, with annual interest rates exceeding 10%, far above bank rates. The borrowed money is invested into Vanke projects. When the project makes a profit, they seem to share in the gains, but the real game is that core executives can earn over 20% returns, and they can withdraw first if problems arise. Ordinary employees who invest bear the risk of losses; when profits are made, everyone gets a share, but when losses occur, only the small players pay the price. These three steps form a perfect closed loop—privatizing profits and socializing debts.
You might ask, why has this system gone unnoticed for so many years?
Two reasons:
First, it’s invisible on Vanke’s financial statements. All operations of Bosang Asset Management are off-balance-sheet and do not appear in Vanke’s consolidated reports. So, if you look at Vanke’s financials from previous years, cash flow appears positive, debt ratios are healthy in the industry, and credit ratings are investment grade. But reports indicate that Vanke’s off-balance-sheet liabilities exceed 100 billion yuan—like a health report showing normal indicators, yet secretly suffering from a severe, unseen illness.
Second, the beneficiaries of this system are numerous—from core executives to middle managers, from financial institutions involved in cooperation to various capital sources introduced into the system. Everyone is making money at each stage, and no one wants to rock the boat.
What broke this silence?
In April two years ago, a partner in Yantai, Bai Run Real Estate, publicly and anonymously reported Vanke’s senior management. The 6,000-word complaint directly accused Vanke of illegally establishing financial institutions, issuing high-interest loans, misappropriating project construction funds, and funneling benefits to executives through the co-investment mechanism. This wasn’t the first complaint; previously, 11 local partners in Yantai had jointly reported Vanke for tax evasion, but that didn’t cause much stir. The real trigger was Bai Run Real Estate’s letter, coinciding with Vanke’s announcement of nearly 50% drop in net profit for 2023. Market sentiment was already fragile. After the report, Vanke’s official response was that the allegations were “seriously false,” but the market didn’t buy it. Credit rating agencies began downgrading Vanke’s credit ratings intensively, with Moody’s directly downgrading Vanke to junk status. Financial institutions started tightening credit limits.
Mid-last year, Pengjinso’s wealth management products began to default across the board, involving over 700 million yuan. Most buyers were Vanke employees. Bosang Asset Management suffered even worse, reportedly losing hundreds of billions by the end of last year, with management fleeing abroad and remaining missing to this day. Then, the dominoes started falling one after another. On the same day, Yu Liang resigned as chairman of the board, and Shenzhen state-owned assets took full control. By around June last year, Zhu Jiusheng was officially taken into custody, with more than ten of his associates subjected to enforcement measures. Even He Zhuo, former general manager of Bosang Asset Management, had been under control since early last year. Meanwhile, the state-owned major shareholder was desperately injecting capital—Shenzhen Iron and Steel Group lent over 25 billion yuan to Vanke, and the Shenzhen State-owned Assets Supervision and Administration Commission stated they had enough “ammunition.”
On the other side, the shadow empire’s holes kept widening. Vanke’s pre-loss last year was 82 billion yuan. Over two years, losses exceeded 130 billion yuan—more than all the profits earned in the past decade combined. It averages over 2 billion yuan in losses every day, even surpassing Vanke’s entire market value.