October 19, 2021

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Forts in the air and broken promises cause world stock markets to fall

Forts in the air and broken promises cause world stock markets to fall

Concerned investors, employees and suppliers describe the chaos in the Chinese real estate company.

The once powerful Evergrande has long been a symbol of Chinese property management. The company has been riding the waves of real estate for decades and has established itself in 280 Chinese cities.

But now the company is on the brink of full collapse as a result of a $ 300 billion debt equivalent to 2,600 billion kroner. This has tarnished the company’s credit rating, stock price and reputation.

The company is struggling to find funds to repay the huge debt. They have offered both real estate and parking space to repay the loan in cash, but investors have given the plan a slippery slope.

– All I want is money. I did not consider this project, says an investor named Feng.

Castles in the air and broke promises

Many former employees and analysts have recently described the company’s strategy as a fortress in the air. Former employees say they were pressured to sell financial products that offer guaranteed profits of up to nine percent.

They strongly encouraged us to strengthen the company’s performance and rewarded us for it, says a former sales employee who speaks anonymously.

Large returns were promised to investors, including a plan to build a tourist city in Suzhou, eastern China.

The city is reminiscent of an old European village. Unfinished buildings are now in danger of being left as ghost buildings that will never be completed.

Investors say they were pressured to give the company the right to sign documents on their behalf and that they trust the company’s reputation.

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One investor says he was surprised by the breached promises.

– Lost everything

– An employee of the company says that many customers keep their assets and pensions in Evergrande because they believe that they are under the control of Chairman Xu Ji and that nothing will go wrong.

Another employee said he and his relatives had invested 1.5 million yuan, equivalent to 2 million kroner, after promising to return it.

– Now we have lost everything, She says.

Outside the company’s headquarters, many gathered in the hope that they would get the money they deserved. Cleaner Wang Demi was one of them, and she slept on a cardboard platform.

She is trying to get money on behalf of 70 people who were cleaners for the company. She has borrowed from sharks to pay some employees.

– We cannot repay these loans, Says the cleaner.

Affects the whole world

Real estate accounts for the bulk of the total Chinese economy. Evergrande’s bankruptcy has sent shock waves across the global stock market.

Of concern is that a bankruptcy can have a snowball effect, affecting other parts of China and the rest of the world.

– The real estate market is the most important driver of the Chinese economy. Olav Chen, portfolio manager at the store brand, says that if the company goes bankrupt, it could signal that other companies in China could also go bankrupt. N.R.K.

Stock markets around the world fell on Monday, including the key index of the Oslo Stock Exchange, which fell 2.35 percent at the close.

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