Crisis-hit Chinese property developer Evergrande used billions of dollars raised by selling wealth management products to retail investors to plug funding gaps and even to pay back other wealth management investors, according to executives of the company in Shenzhen.
Evergrande financial advisers marketed the products widely, including to homeowners in its apartment blocks, while its managers persuaded subordinates to invest, said the executives of Evergrande’s wealth management division.
One executive suggested the products were too high risk for ordinary retail investors and should not have been offered to them. The executives were speaking during a meeting, witnessed by the Financial Times, with angry investors who went to the company’s Shenzhen headquarters to try to get their money back.