Hand Back Your Bonuses and Commissions, Evergrande’s Ex-Employees Told

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Evergrande Center building in Shanghai on Sept. 22, 2021.

China Evergrande Group has demanded that current and former managers return part of their salaries and bonuses. Employees at its wealth management arm are to return commissions tied to the unit’s wealth management products.

The monies must be received by Saturday Nov. 30, a move likely to address the funding gaps in Evergrande Wealth’s repayment obligations, according to a person close to the company.

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Evergrande Group has asked managers and employees to return a portion of their salaries, bonuses, and commissions to fill funding gaps for Evergrande Wealth's obligations.
By the end of 2021, Evergrande Wealth's outstanding obligations amounted to 41 billion yuan, with over 30 billion yuan remaining unpaid as of August 2023.
Evergrande has faced a liquidity crisis since 2021 and was ordered to liquidate by a Hong Kong court in 2023 after failing to satisfy offshore bondholders with a debt restructuring plan.

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Who’s Who

China Evergrande Group: China Evergrande Group is demanding current and former managers return part of their salaries and bonuses to address funding gaps in its wealth management arm. This comes amid ongoing financial difficulties and a liquidity crisis that began in 2021. Evergrande Wealth had a large unpaid obligation and was suspected of illegal fundraising after failing to meet repayment obligations since 2021. Former employees report efforts to ensure property projects are completed despite near-exhausted funding.

Evergrande Wealth: Evergrande Wealth, originally Evergrande Financial Service, launched in 2015 as a P2P platform during China's lending boom. It faced a liquidity crisis from 2021, with outstanding obligations reaching 41 billion yuan by end-2021. Amid defaults and legal issues, the company demanded managers return part of their pay to address funding gaps. The firm had prioritized unfinished property projects but now faces funding exhaustion and employee pushback over commissions tied to wealth management products.

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What Happened When

2021：: Evergrande's liquidity crisis became public; managers from 2017 to 2021 were asked to return 15% of their salaries and bonuses.

September 2021：: Evergrande failed to repay investors in its wealth management products; Chinese police arrested some Evergrande Wealth staff and launched a criminal investigation.

By the end of 2021：: Evergrande Wealth had outstanding obligations totaling approximately 41 billion yuan.

August 2023：: Evergrande Wealth announced it could no longer meet its obligations, leaving more than 30 billion yuan unpaid.

January 2024：: A Hong Kong court ordered Evergrande's liquidation after it failed to create an agreeable debt restructuring plan for offshore bondholders.

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