SHANGHAI (Reuters) – The Shenzhen government is investigating a unit of Chinese developer Evergrande, the city’s financial regulator told investors on Monday, in the first sign of an official inquiry into the wealth management crisis at the real estate giant.

Evergrande is the most indebted property development company in the world, with its headquarters in Shenzhen. It owes $305 million and has ran out of cash. This raises concerns that it could have an impact on China’s financial system.

Its liquidity crisis grew worse when the wealth arm of Evergrande missed a payment for wealth management products (WMPs) earlier this month. This prompted protests from investors, who are afraid they will not get their money back.

The Shenzhen Financial Regulatory Bureau stated that “relevant departments” of Shenzhen’s government had gathered information about Evergrande Wealth, and they are launching an investigation to determine the cause of this issue.

The letter, sent to investors following investor requests, stated that it is urging China Evergrande Wealth and China Evergrande Wealth, to pay back their investors.

The government of Shenzhen and Evergrande did not respond to inquiries for comment.

China Evergrande was among other highly-indebted conglomerates that issued high-yielding, non-government-restricted WMPs to investors. It is an easy way to borrow money and avoid restrictions.

More than 80,000 people – including Evergrande employees, their families and friends as well as owners of Evergrande properties – bought WMPs through Evergrande that raised more than 100 billion yuan ($15.47 billion) in the last five years, and some 40 billion yuan of the investments are outstanding, a sales manager of Evergrande Wealth and investors said. [L4N2QM1U0]

($1 = 6.4662 renminbi)