GUANGZHOU, China—Investors in financial products issued by China Evergrande Group protested outside the cash-strapped company’s offices in Guangzhou on Tuesday, with many worried that their returns would be sacrificed to keep real estate projects afloat.
Members of the crowd of roughly 100 people shouted “Evergrande, return our money!”, reprising a chant used by disgruntled investors and suppliers last autumn as the deterioration in its financial position became apparent.
On Friday, Evergrande announced a dial-back of plans to repay investors in its wealth management products, announcing that each could expect 8,000 yuan ($1,256) per month in principal payment for three months starting in January, irrespective of when their investment matures.
Once China’s top selling developer but now reeling under more than $300 billion in liabilities, Evergrande had previously agreed to repay 10 percent by the end of the month when the product matured, without specifying an amount.
The change sparked investor fear that they won’t get their money back.
“I think it’s hopeless, and I’m scared, but if we don’t fight for our rights, that’s worse,” said a retired woman surnamed Du who was among those outside Evergrande’s offices in the southern Chinese metropolis and said she had invested one million yuan in Evergrande wealth management products.
“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.
China Evergrande did not respond to a request for comment on the protestor on the concerns of the investors.
By midday, about 60 of those protesting had been hemmed in by rows of security personnel. Videos circulating in WeChat groups showed several people being detained at the scene.
In the afternoon, a group of 20 remaining protesters were told to leave a street near Evergrande’s offices, while security stopped and took the details of at least three people who tried to describe their experiences to a Reuters reporter.
High Yields and Gucci Bags
Lured by the promise of yields approaching 12 percent, gifts such as Dyson air purifiers and Gucci bags, and the guarantee of China’s top-selling developer, tens of thousands of investors bought wealth management products through Evergrande.
More than 80,000 people—including employees, their families, and friends as well as owners of Evergrande properties—bought products that raised more than 100 billion yuan in the past five years, said a sales manager of Evergrande Wealth, launched in 2016 as a peer-to-peer (P2) online lending platform that originally was used to fund its property projects.
“We worry we will be sacrificed,” said a 34-year-old protester who works in e-commerce and would only give her name as Sophie, for fear of reprisal from authorities.
“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 said.
Protesters and members of messaging groups of people owed money by Evergrande have said they had been told by police not to cause trouble, and had seen their chat groups blocked.
Sophie said police had taken her to the station four times since she joined protests at Evergrande’s headquarters in the nearby city of Shenzhen in September.
“We don’t know what happens to our money but we’re expected to keep quiet, it’s not right,” she said.
($1 = 6.3718 Chinese yuan renminbi)
By David Kirton