Xi Jinping's regime ‘floundering’ says Paul Monk
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
The crowd congregated outside the building in Guangzhou on Tuesday, anxious about the future of their investments with the company. Around 100 people surrounded the company’s offices to chant, “Evergrande, return our money!” This echoed the demands heard when the state of Evergrande’s affairs became known last year.
Shares in Evergrande dropped by almost 90 percent last year as investors became increasingly worried about the security of their investments.
Evergrande was heavily embedded in the Chinese economy – the world’s second-largest economy.
Onlookers worry that the effect of a collapse could be similar to that of the Lehman Brothers in the US, and have a ripple effect on the property and real estate sectors which account for up to 30 percent of China’s GDP.
On Friday, the company announced plans to repay those who invested in their wealth management products, offering 8,000 yuan – just over £930 – each month for three months, as of January.
Previously, they had avoided putting a specific sum on repayments, instead agreeing to repay 10 percent of investments by the end of the month when the product matured.
One woman at the protest told Reuters news agency: “I think it’s hopeless, and I’m scared, but if we don’t fight for our rights, that’s worse.
“The economy’s not good at the moment, these are ordinary people and they need this money for kids, for supporting their parents.”
She said she had invested one million yuan in the company’s wealth management products.
Another protester spoke of the impacts on different generations of the teetering company.
She said: “We worry we will be sacrificed.
“It’s okay for younger people like me, we can still earn it back, but I’m worried about the older ones who put everything into this.”
She added: “We don’t know what happens to our money but we’re expected to keep quiet, it’s not right.”
Russia ready to turn ‘everyone to radioactive ash’ [REPORT]
Brexit LIVE: Money flooding into UK as City doing ‘very well’ [LIVE]
Tony Blair POLL: Should Queen strip ex-PM of knighthood? [POLL]
Investors had been attracted to funnel their funds into Evergrande by the promise of up to 12 percent yields on wealth management products.
This prospect tempted employees, families, and Evergrande property owners alike, their confidence bolstered by the reputation Evergrande had cultivated as China’s top-selling developer.
The company, now mired in debt, suspended its trading in Hong Kong over the new year as investors held their breath and waited over plans for the restructuring of the business.
Evergrande’s debt now totals in excess of $300 billion, or £222 billion.
In a statement from the stock exchange, no explanation was given as to why the trading had suddenly halted.
Trading has now resumed, with shares creeping up by 10 percent on Tuesday.
The company is desperately attempting to find cash by selling supplies and assets.
The real estate giant is scrambling for this cash to repay investors in wealth management products.
It followed the Chinese Communist Party changing the rules on how much money property developers could borrow.
Source: Read Full Article