Evergrande says six executives bought back investment products ahead of time
BEIJING (Reuters) – Six executives at heavily indebted Chinese firm Evergrande bought out some of the firm’s investment products earlier this year, the real estate group said on Saturday.
Between May 1 and September 7, the six executives prepaid 12 investment products, Evergrande said in a statement posted on its website, without identifying the executives or giving details on the nature of the products.
“Regarding the early redemption of Evergrande wealth investment products by some managers, the group company takes the matter seriously,” the company said.
Evergrande said it has requested that all funds redeemed by the six managers in advance be returned within a certain time frame.
Harsh penalties will also be imposed, he said.
Evergrande, with liabilities of more than $ 300 billion, is in the grip of a liquidity crunch that has caused it to raise funds to pay its many lenders and suppliers.
The company embodied China’s freewheeling era in borrowing and construction. Uncertainty over its ability to meet its financing obligations – equal to 2% of China’s gross domestic product – has rocked markets.
The group has been hit by recent downgrades, with S&P Global Ratings and Fitch Ratings warning of the risk of default.
Reporting by Ryan Woo; edited by Richard Pullin