When struggling Chinese real estate giant Evergrande ran out of cash earlier this year, it turned to its own employees with a strong case: Those who wanted to keep their bonuses should give Evergrande a short loan. term.
Some workers have asked friends and family for money to lend to the company. Others borrowed from the bank. Then, this month, Evergrande suddenly stopped repaying the loans, which had been billed as high-interest investments.
Today, hundreds of employees joined panicked homebuyers to demand reimbursement from Evergrande, rallying outside the company’s offices across China to protest last week.
Once China’s most prolific real estate developer, Evergrande has grown into the country’s most indebted company. It owes money to lenders, suppliers and foreign investors. He owes unfinished apartments to homebuyers and has racked up over $ 300 billion in unpaid bills. Evergrande faces lawsuits from creditors and has seen its shares lose more than 80% of their value this year.
Regulators fear that the collapse of a company the size of Evergrande will cause upheavals throughout China’s financial system. Yet, so far, Beijing has not intervened with a bailout, having promised to teach the indebted corporate giants a lesson.
Angry protests by homebuyers – and now the company’s own employees – could change that calculation.
Evergrande is at the mercy of buyers of nearly 1.6 million apartments, according to one estimate, and could owe tens of thousands of its employees money.
While Beijing remains relatively silent on the future of the company, those who are owed money say they are getting impatient.
“We’re running out of time,” said Jin Cheng, a 28-year-old employee from the eastern city of Hefei, who said he invested $ 62,000 of his own money in Evergrande Wealth, the investment arm of the company, on demand. senior management.
As rumors circulated on the Chinese internet that Evergrande could go bankrupt this month, Jin and some of his colleagues gathered outside provincial government offices to pressure authorities to intervene.
In the southern city of Shenzhen, homebuyers and employees crowded into the lobby of Evergrande’s headquarters last week and shouted for reimbursement. “Evergrande, give back my money that I earned with blood and sweat!” some could be heard screaming in video footage.
Jin said employees at Fangchebao, Evergrande’s online platform for real estate and auto sales, were told that each department should invest in Evergrande Wealth on a monthly basis. Evergrande did not respond to a request for comment, but the company recently warned it was under “enormous” financial pressure and said it had hired restructuring experts to help determine its future.
For more than two decades, Evergrande has been China’s largest developer, making money out of a real estate boom on a scale the world has never seen. With each success, the company has expanded into new areas: bottled water, professional sports, electric vehicles.
© 2021 The New York Times Press Service