Yu Faxiang, a prominent Zhejiang entrepreneur, has been thrust into the spotlight due to a liquidity crisis involving over 10 billion yuan in financial products under the "Xiangyuan Group."

On the evening of December 22, Anhui Gourgen Traffic Construction Co.,Ltd. (603815.SH) and Zhejiang Sunriver Culture Tourism Co.,Ltd. (600576.SH) announced that their controlling shareholder, Yu Faxiang, had been subjected to criminal enforcement measures by the Shaoxing Public Security Bureau for alleged criminal activities. The case remains under investigation.

Yu Faxiang controls three listed companies—Anhui Gourgen Traffic Construction Co.,Ltd., Zhejiang Sunriver Culture Tourism Co.,Ltd., and HAICHANG HLDG (02255.HK)—spanning A-shares and H-shares, with businesses in real estate, cultural tourism, infrastructure, and more. His empire boasts total assets exceeding 60 billion yuan.

By midday on December 23, shares of Zhejiang Sunriver Culture Tourism Co.,Ltd. and Anhui Gourgen Traffic Construction Co.,Ltd. on the A-share market, as well as HAICHANG HLDG on the Hong Kong stock exchange, had opened significantly lower, plunging 28%, 4.64%, and 6.25%, respectively.

Although Yu Faxiang holds no executive roles in Anhui Gourgen Traffic Construction Co.,Ltd. or Zhejiang Sunriver Culture Tourism Co.,Ltd., he serves as an executive director at HAICHANG HLDG. The company issued an urgent statement on December 22, announcing that Executive Director Ouyang Ming would temporarily assume Yu’s duties as board chairman, executive director, and CEO until further notice.

As recently as October 2025, Yu Faxiang ranked 465th on the Hurun Rich List with a net worth of 14.5 billion yuan.

**Xiangyuan Group’s 60 Billion-Yuan Empire Faces 10 Billion-Yuan Liquidity Crisis** The financial products under the "Xiangyuan Group" were reported to have defaulted in early December. Since these products were backed by Xiangyuan Holding Group—the indirect controlling shareholder of Zhejiang Sunriver Culture Tourism Co.,Ltd.—and guaranteed by Yu Faxiang, the Zhejiang tycoon’s liquidity risks were fully exposed.

A Shaoxing government task force was deployed to Xiangyuan Holding Group on December 12 to assess its assets and liabilities, ensuring normal operations while urging debt repayment.

Disclosures show that as of December 16, Yu Faxiang and related parties held 612 million shares (58.08% stake) in Zhejiang Sunriver Culture Tourism Co.,Ltd., all of which were frozen by courts. About 462 million shares (75.43%) were additionally marked for secondary freezes, linked to debt risks involving Xiangyuan Holding and Yu’s affiliated platforms.

Shen Baoshan, Xiangyuan Holding’s executive president, admitted to investors that the group’s 60 billion yuan in assets—including real estate and listed company stakes—were overshadowed by over 40 billion yuan in liabilities. The downturn in real estate and the revocation of financing platform "Zhejiang Financial Center’s" trading license exacerbated the crisis.

**The Rise and Fall of a Zhejiang Tycoon** Before the investigation, Yu Faxiang’s entrepreneurial journey was legendary. Born in the 1970s in Shengzhou, Zhejiang, he founded Xiangyuan Holding’s predecessor, Hainan Weixiang Decoration, in 1992. Within years, he pivoted from decoration to real estate.

In 2001, he entered capital markets by acquiring listed company Qiong Haide. His expansion continued with the 2004 acquisition of Anhui Highway Engineering (now Anhui Gourgen Traffic Construction Co.,Ltd.) and ventures into electronics and tourism. By 2008, Xiangyuan had acquired major tourist sites like Fenghuang Ancient Town and Zhangjiajie’s Bailong Elevator. In 2017, it took over Wanjia Culture, later renamed Zhejiang Sunriver Culture Tourism Co.,Ltd.

Notably, just before the financial product defaults, Xiangyuan spent 2.295 billion HKD in June 2025 to acquire HAICHANG HLDG, adding a third listed company to Yu’s portfolio. While Xiangyuan framed the deal as a strategic move in tourism, critics speculated its real estate-driven motives.

Both Zhejiang Sunriver Culture Tourism Co.,Ltd. and Anhui Gourgen Traffic Construction Co.,Ltd. have since emphasized their operational independence from Xiangyuan Holding, denying any misuse of funds or improper guarantees.