The former president of Evergrande Real Estate was investigated and many cronies lost contact. They have raised tens of billions of dollars.

Since China Evergrande defaulted on its debt, the outside world has been paying close attention to all the progress of the group. In particular, who will be responsible for the huge debt hole and who will bear the corresponding legal responsibility?

Recently, with the news that Ke Mou, the former president of Evergrande Real Estate, a subsidiary of China Evergrande, was taken away for investigation, the suspicion about the arrival of "liquidation" in the industry is rampant.

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According to the information verified by CBN from multiple channels, Ke is not the first professional manager in Evergrande Department to be taken away for investigation, but he is an executive so far. June 5438 +2020 10 became the president of Evergrande Real Estate Group and left in mid-2022.

The reporter called Ke on the 7 th and was already in the state of call reminder. Another internal news shows that several of Ke's former cronies are in a state of losing contact together.

In August 2020, before Ke became the president of the real estate group, the financial situation of China Evergrande was concerned by the outside world because of a "distress letter" posted on the Internet. Although Evergrande completed the spin-off and listing of Evergrande Real Estate and several rounds of investment and financing of Evergrande Automobile this year, the share prices of Evergrande departments represented by Evergrande Real Estate, Evergrande Automobile and Hengteng Network have climbed to historical highs, but insiders have vaguely felt that "money is tight". "For a time, all the money in the group was in arrears, and only two departments could use cash, one of which was the finance department. As long as you can get a financing, you will settle the reward commission, the highest is 1 100 million, and the reward can reach 654.38+0.5 million. "

Ke, who took office at this time, is faced with a new mission of stabilizing the operation of real estate groups and reducing financial leverage. If all went well, he could have become an upright minister. Why did he become the first Evergrande executive to be investigated?

Workplace star

Xu Jiayin, Chairman of the Board of Directors of Evergrande Group, attaches great importance to loyalty. Most of his cronies are old people who work hard with him for the New Year, but they are also willing to promote young people. There are many young executives in their thirties and forties in the group, and Ke Mou is one of them.

Kemou joined Evergrande at the end of 2008, which coincided with the difficult period of China Evergrande's initial listing failure. However, with the rapid recovery of the domestic real estate market in 2009, Evergrande also began to usher in the most magnificent stage of its development in this year: it successfully landed in the Hong Kong stock market, acquired Guangzhou Football Club, won the AFC Champions League in the Chinese Super League, won the first annual sales scale of real estate development in the industry, and Xu Jiayin became the richest man in China.

During this period, Evergrande tasted the dividend of the great development of the property market and stood out from the rest. Many ordinary people in China know the name of Evergrande. In some small cities along the 4th and 5th lines in the Mainland, local officials in charge of investment promotion once regarded Evergrande as the absolute leader of real estate enterprises, and its popularity surpassed Vanke and Country Garden.

Kemou rose rapidly during the high-light period of Evergrande, and successively served as the general manager and assistant to the president of the brand management center of the group, the chairman of Jilin Company, the chairman of Shenzhen Company, and the CEO of real estate group. The speed of his promotion is not surprising.

Many people familiar with Ke told CBN that Ke was quick-thinking and capable, and was trusted by his boss. He was appointed as the president of Shenzhen company on 20 16, which can prove this point.

20 16 Evergrande headquarters moved from Guangzhou to Shenzhen. At that time, the Shenzhen property market reversed from the downturn of 20 14 and 20 15, which became the deep charge of a new round of real estate rising cycle, and the old cities all over Shenzhen were in full swing. Ke Mou led Evergrande Shenzhen Company to make great efforts in this hot land. In this year, Evergrande put forward the plan of real estate group returning to A-shares, and achieved contracted sales of 373.37 billion yuan by the end of the year, up 85.4% year-on-year, ranking first in the industry.

At this time, Evergrande is in full swing. Even if there are only a few projects in Shenzhen, outsiders can see how important the position of president of Shenzhen company is under the boss's eyes. Since then, Evergrande Pearl River Delta Company, which was originally managed by Xu Jiayin's second son, has also been included in Ke's jurisdiction.

From June 5438 +2020 10, Ke succeeded Dali Tao as the president of Evergrande Real Estate Group, standing at the peak of the workplace. At that time, he had just passed the age of no doubt.

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Shenzhen old reform

For many years, Evergrande's main battlefield is not in the first-tier cities, so the group's project reserves in Shenzhen are not much. Therefore, when Ke became the president of Shenzhen Company, his first task was to get the project. Looking back on Evergrande's achievements in Shenzhen for many years, it is not in the open market, but in urban renewal.

When Evergrande disclosed its 20 18 annual results, it revealed that 45 old renovation projects were reserved in Shenzhen, with a planned construction area of 29.03 million square meters. By 2002 1 annual report, the number of old renovation projects in Shenzhen officially announced by the group has been further upgraded to 55, of which about 21has been promoted to the project establishment stage.

A person familiar with Shenzhen's old reform market told CBN that the promotion cycle of an old reform project is roughly: negotiation with the owner, government project establishment, special planning, demolition, land transfer payment, formal development and construction, and sales.

Among them, the establishment of the project is the key link, which indicates that the project has been recognized by relevant departments and basically established the main body of development. Generally, there are publicity information about old projects. Prior to this, the negotiation stage with the owner was the preliminary agreement, such as the preliminary service agreement signed with the village collective.

Compared with this old improvement, half of Evergrande's contracted projects in Shenzhen are still in the early stage. According to the statistics of public information, about seven old renovation projects have completed planning, established the implementation subject and project name, and are in the stage of completion or start-up, most of which were signed before Ke performed his duties.

According to an insider, Ke's recent five years in Shenzhen are mainly about signing a bunch of contracts. Considering the long cycle and complicated procedures of the old transformation project, it is normal to transform it into a project within ten years. Therefore, there are very few projects that have really been changed and realized cash return under his hands.

Even so, the capital market is still excited about Evergrande's project reserves in Shenzhen. In the performance reports or press releases published by Evergrande from 20 17 to 20 19, the Shenzhen project reserve with an estimated value of up to 400 billion yuan was once the main publicity highlight of the group and a high-quality "asset" bearing the company's stock price valuation.

According to the traditional development line inside Evergrande, Kemou's main achievement during his stay in Shenzhen was to sign some early old reform contracts, and his contribution to the company was not outstanding. If the sales amount is taken as the measure of regional contribution, the contribution of Shenzhen company is really lacking, but Kemou's position in the group only rises and falls. Even when he became the president of the real estate group in 2020, there were many surprises inside, because the real estate development business accounted for more than 90% of the performance of China Evergrande for many years, and Ke's practical experience in development and sales was slightly insufficient among the presidents of the first-line regions or cities of Evergrande.

Financial cadres

What ability makes Ke be favored by the boss and promoted to the center? What made him the first Evergrande executive to be taken away for investigation?

According to informed sources, whether it was highly valued before or it is now in deep trouble, it may be related to financing. It is reported that during Ke's tenure as the president of Shenzhen Company, the "money" of Shenzhen Company ranked first in the group almost every year, with an average amount of 30 billion to 40 billion. This means that Ke may obtain tens of billions of funds from various financial institutions every year with dozens of old contracts. Some of these funds are obtained in the name of the old reform, and some are obtained by means of asset mortgage.

According to people familiar with Shenzhen's old reform process, financial institutions have pre-financing services for old reform projects, but they are generally cautious. Their enthusiasm for participating in industrial transformation and commercial transformation projects is not high, but they are more interested in the transformation of old villages. Mature people in the industry say that the purpose of funds before the old reform project is mainly to pay the demolition compensation and project funds to the villagers who have been demolished. There are two necessary prerequisites for obtaining financing support from financial institutions. First, the developer can only seek financing from financial institutions after reaching a preliminary agreement with the relevant institutions of the demolished village. The demolition and compensation schemes are examined and approved by the relevant institutions of the village committee, and the project establishment and special planning are formally approved by the relevant departments. Under normal circumstances, the financing funds before the old reform need to be earmarked, for example, you can only enter the zero demolition compensation account.

Another trader of the old reform project also told CBN that according to relevant policies, financial institutions can provide some special loans for the old reform, which are mainly used to pay compensation for demolition. When the real estate market was booming in the early days, some banks were more enthusiastic about the financing of old projects. It is reported that the financing funds before the old reform ranged from several hundred million to several billion, mainly depending on the volume of the project.

In the eyes of the above-mentioned people familiar with the old reform process, it is unrealistic to obtain financing in the early stage of negotiation with the owners or villagers, but it is possible after the project is established. Some financial institutions will provide pre-financing funds at this stage, and the cost is high, as high as 20%. "Strictly speaking, it is illegal for financial institutions to provide financing at this stage. Walking in the gray area and playing the ball is very risky. "

Among the 55 old renovation projects announced by Evergrande 202 1, 2 1 approved projects can be inquired publicly, of which only a few are in the construction stage, and most of the others have not completed special planning or entered the stage of demolition compensation. Then, how do limited projects get tens of billions of financing, do they need tens of billions of funds to operate, and where do these funds flow? This may be the biggest mystery surrounding Evergrande Shenzhen Company.

A person from a financial institution who had a cooperative relationship with Ke Mou revealed to CBN that Evergrande has various financing methods, including pre-financing of old projects and pledge of fixed assets, because the old projects acquired by the company include assets such as factories and office buildings, which can be used for pledge loans.

According to an insider of Evergrande, there are not many projects under construction in Shenzhen, and there are not many sales rebates. Financing tens of billions a year, borrowing new and returning old every year. Now a lot of this money has not been paid, and going back is easy to involve procedural violations.

Where did the money go?

According to the 20021annual report disclosed by China Evergrande, there are five listed companies registered in Shenzhen: Qianhai Linjun Industrial Development Co., Ltd., Shenzhen Hongteng Investment Management Co., Ltd., Tao Jian Digital Development Co., Ltd., Shenzhen Wanjing Investment Co., Ltd. and Shenzhen Yongheng Real Estate Co., Ltd., among which the first four companies all appear in the list of major implementers of old reform projects established by Evergrande.

Without exception, enterprise survey data show that each of the five companies contains different amounts of judicial risks. Taking Haijunlin Industry as an example, the company has been involved in judicial risk warning 67 times, including financial loan contract disputes, trust disputes, housing sales contract disputes and so on. Wanjing Investment contains 62 risk tips, involving bill disputes and contract disputes.

The lawsuit of Eternal Property mentioned above involves a private loan dispute. A judgment of Luohu Court in July, 20021year shows that the appellant Shenzhen UnionPay Bao Financing Guarantee Co., Ltd. filed an appeal against the previous civil ruling of Luohu Court because of a private loan dispute with the appellees Shenzhen Yihua Jewelry Co., Ltd. and Yongheng Real Estate. In the court opinion of the appeal jurisdiction ruling, the Luohu court stated that the case was a private lending dispute after review by the court.

However, the above-mentioned court ruling does not explicitly involve information such as the amount of private lending, the use of funds, and the specific time of occurrence. In April 2020, the equity of Eternal Real Estate was pledged to a trust company in the north, and the pledge is still valid. However, CBN failed to know the number of pledged shares of Eternal Real Estate and the pledger.

Lin Jun Industry has a compensation lawsuit for demolition. According to the judgment of Shenzhen Nanshan Court No.2016, Shenzhen Jinhong Xincheng Investment Co., Ltd. filed a lawsuit in court, demanding that Qianhai Linjun Industrial Co., Ltd. and Evergrande Real Estate Group Co., Ltd. pay the plaintiff about 300 million yuan in compensation for demolition and liquidated damages.

In the tens of billions of capital exchanges of Evergrande Shenzhen Company every year, the 300 million funds involved in this case are only a fraction. The question is, if the financing money before the old reform is mainly used for demolition compensation, why is the compensation of 300 million yuan in arrears? Where do tens of billions of financing funds go every year?

The above-mentioned financial person who has had cooperation experience with Ke revealed: "When money enters their company account, there is no way to trace it. I don't know where to use it. Anyway, not yet. I only have a few mortgage projects in my hand. It should not be completely lost. "

According to the analysis of insiders of Evergrande, the funds are usually allocated by the group in a unified way, and most of them are used to pay off debts. Especially since 2020, the Group has been determined to change the past highly leveraged development model, and a large amount of funds have been transferred to pay off debts. At that time, most suppliers' payments were suspended internally, and other departments could hardly get any money except the incentive commission for new financing and the cost of marketing outlets.

Evidence shows that Evergrande's interest-bearing liabilities dropped from a high of 874.3 billion yuan at the end of 20 19 to 674 billion yuan at the end of 200210, and then to about 570 billion yuan in 20021year. At the same time, the balance of accounts payable and bills increased from about 540 billion at the end of 20 19 to nearly 670 billion in 20021year.

The huge financing of high Jango loan once supported Evergrande's rapid growth, but the huge financing cost has also become the main cause of dragging down the company. From 20 16 to 20 19, the total amount of interest-bearing loans of Evergrande has climbed from more than 500 billion to more than 800 billion, and the average borrowing cost of the company for many years is above 8%, which means that the company's annual interest expenditure is as high as tens of billions.

For example, in 20 19, the company's total interest-bearing debt was the highest, and the interest expenses disclosed in the annual report totaled about 68.5 billion. In this year, Evergrande achieved a total contracted sales of more than 600 billion yuan, but the profit attributable to shareholders was only 65.438+0.728 billion yuan.

An insider of Evergrande lamented that the boss paid too much attention to financing and gave him a high reward. Xia Moujun, the former group president in charge of overseas financing, and Ke Mou, who has been operating in Shenzhen for many years, are all good at taking money.

On July 22, 2022, China Evergrande Group and Evergrande Real Estate Co., Ltd. jointly announced that according to the preliminary investigation results of the Independent Investigation Committee, it was found that the deposit of 65.438+0.34 billion yuan in the account of Evergrande Real Estate Co., Ltd. was forcibly transferred by the bank, and preliminary results were obtained. Xia Moujun, executive director and chief executive officer of China Evergrande Group, Pan Morong, executive director and chief financial officer of Evergrande Group, and Ke Mou, chief executive officer of subsidiary of Evergrande Group, are responsible for this matter. In this regard, the board of directors of China Evergrande Group decided to resign from the relevant positions held by the three of them.