2023-09-28 01:46:48
Financial dismantling｜From too big to fail to dying｜Yan Baogang
Two years ago (September 2021), I wrote a feature for “Standpoint News”, which was a review of the “past and present lives” of Evergrande and Xu Jiayin. At that time, Evergrande did not even default, but its stock price plummeted, and there were already signs of a burnout. .
The assessment at the time was that Evergrande was “too big to fail”。
“But today I still believe that Evergrande will not completely collapse: yes, bond and note holders will face haircut following default, but they will not lose everything; retail investors of financial products who are forced to take to the streets will definitely be stamped in this way Said: “Investors of Evergrande Wealth cannot lose everything.” The government will definitely not stand idly by and may even get back all the money.
The outcome of Evergrande is likely to be a “HNA model” solution: the group will be dismantled, the real estate will be taken over by central enterprises/state-owned enterprises, and small owners can still repossess the properties; valuable electric vehicles will be sold to rivals; as for suppliers, they will receive certain subsidies from the government . “
Of course, everyone is in control of the subsequent development, but I still can’t believe it to this day. Evergrande can survive until today two years later? ? ? Moreover, Zhong has the ability to resume trading, and even has Cai Yan to ask everyone to buy low? ? ? The whole thing was completely bizarre.
The latest development is that following Evergrande’s former CEO Xia Haijun and former CFO Pan Darong and many other executives were investigated for violations, Bloomberg quoted people familiar with the matter as saying that Evergrande Chairman Xu Jiayin has been placed under police surveillance and is currently under residential surveillance. It is unclear why Xu Jiayin was placed under residential surveillance. In China, this kind of police action does not constitute an official arrest, nor does it mean that Xu Jiayin will be prosecuted.
Evergrande has had problems for several years, and Xu Jiayin has never been in trouble. Why is he under residential surveillance today? It is believed to be related to Evergrande’s recent revelation that its main domestic subsidiary, Evergrande Real Estate, was under investigation by the China Securities Regulatory Commission, which made the group unable to meet the qualifications for the issuance of new notes and also affected the entire debt restructuring plan. Some Evergrande bondholders pointed out that they were surprised by the relevant investigation, saying that if Evergrande fails to submit a new debt restructuring plan before October 30, the bondholder group will support the previous liquidation petition once morest Evergrande.
“Ming Pao” has clearly pointed out earlier that the case filed once morest Evergrande Real Estate by the China Securities Regulatory Commission is by no means new. It had disclosed relevant information as early as August 16. At that time, Evergrande was still applying for resumption of trading, and it revealed that it was unable to issue new shares due to the filing. Prior to the debt incident, in just 40 days, debt restructuring meetings had been postponed and canceled three times for various reasons, but the original debt restructuring plan was still pushed forward, causing the market to question whether Evergrande knew in advance that it was not qualified to issue new bonds and only implemented “delay”. Zi Jue”.
What is even more noteworthy is that following Evergrande Real Estate disclosed on the Shenzhen Stock Exchange that it had been filed by the China Securities Regulatory Commission, China Evergrande, which is listed on the Hong Kong stock market, has never explained its debt obligations to the Stock Exchange regarding the filing of a case once morest its important domestic subsidiary. As for the impact of restructuring, on the eve of the deadline for Evergrande’s delisting, the Stock Exchange allowed Evergrande, which was saddled with nearly 2.4 trillion yuan in debt, to delist the company before reaching a specific debt restructuring agreement on the grounds that Evergrande met the conditions for resumption of trading. , trading can be resumed, allowing Evergrande related parties to cash out and leave (even though the stock price plummeted by nearly 90%), but the rights of creditors have not been finalized, causing the market to question the decision of the Listing Division of the Stock Exchange.
Just as in the “JPEX chaos”, I have pointed out that the incident exposed that Hong Kong’s formerly professional financial regulatory agencies can become leaky and blindly passive once they encounter political tasks. This time, the Stock Exchange allowed Evergrande to resume trading. Is there another factor of human intervention? Evergrande apparently reported that it was filed by the China Securities Regulatory Commission. Should it be suspended and investigated for violations? A private enterprise that should have violated regulations and defaulted long ago has gone from being too big to fail to dying. The price paid behind it is not only Evergrande’s shareholders and creditors, but also the reputation of Hong Kong as an international financial center.
Note: The views of the column author do not represent the position of this website
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