About 100 aggrieved investors, homebuyers, contractors, and employees participated in a rare protest staged at the headquarters of China's property developer, Evergrande Group, located in Shenzhen, on the night of Sep. 12, Caixin reported.
Demanded money to be returned
Chaos broke out as they demanded repayments of overdue wealth management products (WMPs), with the crowd repeatedly shouting, "Return our money!"
Uniformed security personnel blocked the main entrances of the building, as protesters attempted to reach out to company representatives, Reuters reported.
NEW - Chinese property giant #Evergrande warns in a statement today that there has been "no material progress" so far in selling part of its stakes and that it could default on its enormous debts.— RealEyes1776 (@RE_1776) September 14, 2021
Meanwhile, protests at the company's offices are increasing. pic.twitter.com/zq81Wukz1H
Reuters added that one protester was heard shouting at the company's general manager, "A company as big as yours, how much money has been swindled from ordinary people?"
Evergrande is having trouble. This massively indebted property group might well trigger a market-wide panic. In the meantime, people are already on the street... pic.twitter.com/eFtopcXQHE— Jingzhou Tao 陶景洲 (@JingzhouTao) September 13, 2021
Emotions ran so high that at one point, a woman in the crowd of protesters collapsed.
Police were seen taking away some of the protesters afterwards, while security personnel surrounded those who remained to keep them there, Reuters reported.
Why are people angry?
While the company has proposed repayments for the protesters in two years, they refused to accept the proposal as they were uncertain that the firm could even hold on till the end of the year.
The protests had broken out after Evergrande proposed last week to implement lengthy repayment delays on holders of WMPs, which are the developer's main source of funding.
Such protests against Evergrande are considered rare in China. Although protests by angry investors are common, targeted demonstrations towards large companies across the country are unusual, and might attract attention from the authorities, who prize social stability, and have little appetite for large, unapproved gatherings.
What is Evergrande?
Evergrande is the second-largest property developer in China, and is listed in Hong Kong.
In 2020, the company recorded US$110 billion (S$147 billion) in sales, Reuters reported.
The company, founded in 1996, has assets worth US$355 billion (S$476 billion) today with more than 1,300 developments across China, mainly in smaller cities.
Beyond property, as sales began to slow over the years, it branched out to other businesses, including electric cars, soccer, insurance and bottled water.
Rumours of company going bankrupt not true: Evergrande
As rumours about its impending bankruptcy swirled, Evergrande has stated in a statement on its website that such speculations were completely false, Bloomberg reported.
The company acknowledged that while it was indeed facing difficulties, it was trying to fulfil its responsibilities and doing all it could to restore normal operations and protect the interests of customers.
As Evergrande face massive pressure from investors, its money woes have sparked worries that it could present systemic risks to the country's financial system.
A letter leaked in September 2020 showed that Evengrande had pleaded to the Chinese government to support a backdoor listing plan.
However, the developer claimed the letter was fake.
Bailout might weaken the regime's control
Technically, according to an analysis by The Washington Post (WaPo), the government could step in to offer a bailout to Evergrande.
Beijing is believed to have instructed authorities in Guangdong to come up with a plan to manage the firm’s debt problem.
However, according to the analysis, a bailout might send a signal that China is accepting this sort of reckless borrowing habits that had landed other big conglomerates like HNA and Anbang Insurnace in hot soup too.
However, allowing a company as huge as Evergrande to collapse could send ripples across the country's financial system, and end up antagonising homeowners, whose discontent could potentially weaken the Chinese Communist Party's grip on the country.
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