UPDATE 2-Big Chinese trust firm Zhongrong missed payments on dozens of products

BEIJING, Aug 16 (Reuters) - A leading Chinese trust firm has missed payments on dozens of investment products since late last month, a senior official has told investors, adding to fears of a spillover impact in the financial sector from the country's worsening property crisis.

Zhongrong International Trust Co. has short-term liquidity troubles, the company's chief compliance officer Wang Qiang told dozens of investors at the company's headquarters in Beijing on Monday, according to a person who was at the meeting.

Wang told the investors the firm has no immediate plans to meet repayment obligations for dozens of products that have matured, the person said, declining to be identified due to the sensitivity of the matter.

Zhongrong managed assets worth 785.7 billion yuan ($107.69 billion) at the end of 2022, out of which 629.3 billion yuan were linked to trust products, according to its latest annual report.

Zhongrong and the National Financial Regulatory Administration, the banking sector regulator, did not immediately respond to Reuters' request for comment. Wang, who is also board secretary and legal adviser, could not be reached.

Bloomberg first reported Zhongrong's comments on missed payments.

At the meeting, in response to an investor's enquires, Wang admitted that some of the firm's short-term investment products, with a term from three months to 12 months, used money collected by sales of new products to repay obligations of old products.

Angry investors asked the Zhongrong executive why it sold products under the so-called "pooling of funds" model. China released sweeping asset management rules in 2018 which sought to clamp down on such practices.

"Pooling of funds" refer to a practice under which a trust firm puts all funds, raised via different investment products, in one bucket, and uses the money raised from new products to repay old products.

Wang said the firm has registered its trust products with regulators and it complies with regulations.

Wang also told the investors that the firm will try its best to resume normal operations and it will come up with a plan to repay the obligations either through disposal or restructuring of its assets, according the source.

Zhongrong's meeting with the investors comes after two listed companies over the weekend said they had not received payment on maturing investment products from the trust firm, which traditionally had sizable real estate exposure.

Missed payments of Zhongrong added to concerns about the outsized exposure of China's $3 trillion shadow banking sector, at a time when the faltering economy is being roiled by deepening property downturn. (Reporting by Jason Xue, Ziyi Tang and Ryan Woo; editing by Sumeet Chatterjee and Kim Coghill)