Evergrande execs redeemed investment products ahead of looming bankruptcy
Six top managers of Chinese real estate major Evergrande had redeemed some of its investment products in advance earlier this year, the company said on Saturday, a day after it admitted to a risk of going bankrupt.
Earlier this week, Evergrande said it was under “tremendous pressure” and may not be able to meet its crippling debt obligations.
The executives, who haven’t been named, made early redemptions of 12 investment products between May 1 and September 7, the heavily indebted property group said in a statement, providing no details on the nature of the products.
“Regarding the early redemption of Evergrande wealth investment products by some managers, the group company views the matter seriously,” the corporation said.
The group also warned of severe penalties in case the redeemed funds are not returned within a certain time frame.
Evergrande, China’s second-largest real estate developer by sales, is facing a mounting liquidity crisis, forcing it to raise extra funds to pay lenders and suppliers. The company’s debts have reportedly ballooned to more than $300 billion.
Evergrande’s case is the embodiment of China’s freewheeling epoch of borrowing and building. Uncertainty over the developer’s ability to meet its funding obligations, which is reportedly equal to 2% of China’s gross domestic product, has triggered market turbulence.
The corporation has been hit by ratings downgrades, with both S&P Global Ratings and Fitch Ratings warning of the risk of default. The company’s shares have plunged nearly 80% so far this year, with trading of its bonds repeatedly halted by Chinese stock exchanges in recent weeks.
