Evergrande Group Investigates Redemption of Investment Products by Executives, Requires Six Executives to Return Funds Within Time Limit

Evergrande
(Source: VCG)

At present, the ongoing storm related to the overdue redemption of Evergrande’s wealth management products continues, and doubts about the earlier redemption of these products by some of the company’s senior executives are immense. In response to the doubts, Evergrande has finally issued a thorough investigation announcement.

Early Saturday morning, China Evergrande affirmed that the group attaches great importance to the early redemption of Evergrande wealth management products by some managers, and has now required all the money redeemed by the six managers to be returned within a time limit. The firm will also severely punish these managers.

According to the announcement, as of May 1, 2021, Evergrande’s senior executives above the assistant to the president of various industrial groups, general managers of its provincial companies of real estate groups, and managers above the deputy general manager of Evergrande Wealth Management – a total of 44 people – held 58 products of Evergrande Wealth Management.

From May 1 to September 7, among the above-mentioned managers, nine products owned by eight people expired normally. Nine people subscribed for 13 new investment products, and six people redeemed 12 investment products in advance. As of September 8, 39 people still hold 50 products of Evergrande Wealth Management.

The announcement also stated that the group requires Evergrande Wealth Management to strictly follow the published redemption plan to ensure fairness and justice. At the same time, the middle-level and above employees of Evergrande Wealth Management are required to fulfill their job and continue providing service to clients.

It is worth mentioning that on the evening of September 12, Du Liang, the general manager and legal representative of Evergrande Wealth Management division, admitted that he did redeem products on May 31. He explained that the early redemption was due to a family emergency.

The Evergrande Wealth Management product is an asset management product offered by Evergrande Group. According to the firm’s official website, the business segment of Evergrande Wealth Management is mainly divided into two categories: Wealth management consulting and community financing. The former provides qualified investors with customized investment and financial consulting services such as high-end financial management and private investment; the latter relies on the vast owners of Evergrande Real Estate to provide a full range of community financing services.

Earlier, Xu Jiayin, Chairman of the Board of Directors of Evergrande Group, said at a special meeting that “the company has indeed encountered unprecedented difficulties at present, but we will resolutely fulfill our responsibilities, go all out to resume work and delivery of buildings, and try every means to resume normal operations”

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Since the beginning of this year, Evergrande shares have fallen collectively. As of yesterday’s close of trading, China Evergrande reported a share price of HK$2.54, which has fallen by 82.67% this year, with a market value of HK$33.66 billion ($4.325 billion); Evergrande’s New Energy Vehicle reported a share price of HK$2.98, which has fallen by 90.13% this year, with a market value of HK$29.11 billion; Evergrande Property Services reported a share price of HK$4.6, with a cumulative decline of 48.55% this year.