Chinese shadow bank says it has ‘huge’ debt and can’t pay its bills reigniting fears that the country’s real estate slump may spilling over into the $3 trillion shadow banking sector.

The shadow bank, Zhongzhi Enterprise Group, disclosed to investors on Wednesday that it was “severely insolvent,” according to the Chinese state-owned news outlet lanjinger.com, which also published a letter from the shadow bank.

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

As the group’s assets are concentrated in debt and equity investments and have long durations, collection is difficult, the expected recoverable amount is low, liquidity is exhausted, and asset impairment is severe,” ZEG said.

In addition to its financial services, mining and electric vehicles operations, the group is one of the largest private conglomerates in China. When a trust it partly owns reported missing payments to corporate investors in August, concerns about its finances arose.

As of the end of 2022, Zhongrong International Trust had managed $87 billion for corporate clients and wealthy individuals in China, one of thousands of wealth management firms in the country.

The trust industry, which analysts refer to as “shadow banking,” is estimated to be worth $2.9 trillion, larger than the French economy. The majority of financing provided by shadow banks is off-balance-sheet or provided through non-bank financial institutions, such as trust companies.

Chinese “shadow banking” has come under the spotlight along with concerns about China’s future as the world’s second biggest economy struggles to recover from a protracted real estate crisis.