China's banking regulator took control of the operations of Sichuan Trust Co. Ltd. following the troubled domestic trust company's failure in May to repay about 25 billion yuan to investors who bought into its trust product, Caixin reported.

The China Banking and Insurance Regulatory Commission said in a statement that its Sichuan branch sent a working group jointly formed with the Sichuan provincial government to supervise the trust company's operations and later reorganize its management. The regulator's Sichuan branch said the trust company violated rule on prudent operation and "misused part of its loans and trust investment funds on relevant shareholders and their related parties," according to the report.

Sichuan Trust's failure to repay principal and interest affected more than 8,000 individual investors who invested into its "trust of trusts" investment products. The company has made "little progress" in raising funds through share and asset sales to repay the investors.

The regulator's working group is set to tap a professional institution to guide Sichuan Trust's business operation and take measures to prevent the credit crisis from worsening. Regulators will also press the company to reshuffle its board members.

As of Dec. 22, US$1 was equivalent to 6.54 Chinese yuan.