This archive report was first published on 19 September 2021.
China's troubled property giant Evergrande has been at the center of a financial storm, with hundreds of employees and home buyers demanding their money back after the company stopped paying back short-term loans.
As the company's financial woes deepened, Evergrande turned to its own employees with a strong-arm pitch: those who wanted to keep their bonuses would have to give the company a short-term loan. Some workers tapped their friends and family for money to lend to the company, while others borrowed from the bank.
However, this month, Evergrande suddenly stopped paying back the loans, which had been packaged as high-interest investments. The company's financial troubles have sparked protests across China, with employees and home buyers gathering outside the company's offices to demand their money back.
Evergrande, once China's most prolific property developer, has become the country's most indebted company, owing money to lenders, suppliers, and foreign investors. The company owes unfinished apartments to home buyers and has racked up more than $300 billion in unpaid bills.
Regulators fear that the collapse of a company Evergrande's size would send tremors through the entire Chinese financial system. However, Beijing has not stepped in with a bailout, having promised to teach debt-saddled corporate giants a lesson.
As the situation continues to unfold, those who are owed cash are growing impatient. 'There isn't much time left for us,' said Jin Cheng, a 28-year-old employee who put $62,000 of his own money into Evergrande Wealth, the company's investment arm, at the request of senior management.
Evergrande has tried to sell off parts of its vast empire to raise new funds, but said last week it was 'uncertain as to whether the group will be able to consummate any such sale.' The company has also accused the news media of triggering a panic among home buyers with negative coverage.
However, the company's funding channels started drying up well before last week. According to interviews with employees, state media reports, and corporate documents seen by The New York Times, the company started forcing staff members to help bail it out as early as April, when it began peddling the short-term loans.
