Investors in the financial products issued by the China Evergrande Group protested outside the offices of the financially troubled company in Guangzhou on Tuesday. Many of them feared that their returns would be sacrificed to keep real estate projects alive.
Around 100 participants shouted "Evergrande, give us our money back", repeating a slogan that angry investors and suppliers had shouted last fall when the deterioration in the company's financial position became apparent.
On Friday, Evergrande announced that it was scaling back repayment plans for investors in its wealth management products, saying that anyone could expect 8,000 yuan ($ 1,256) a month in principal for three months starting in January, regardless of when their investment is due. [L4N2TG17J]
Evergrande, once China's top-selling property developer now suffering from liabilities of more than $ 300 billion, previously agreed to repay 10% by the end of the month when the product matures, but without naming an amount.
The change sparked fears among investors that they would not get their money back.
"I think it's hopeless and I'm scared, but if we don't fight for our rights, it's even worse," said a retiree named Du, who was among the people in front of the Evergrande offices in the southern Chinese metropolis said it invested a million yuan in Evergrande wealth management products.
"The economy is not good right now, they are simple people who need this money for their children and their parents," she said.
China Evergrande did not respond to requests for comment on the protest or investor concerns.
By noon, around 60 of the protesters had been surrounded by a number of security forces. Videos that circulated in WeChat groups showed several people who were arrested on the spot.
In the afternoon, a group of 20 remaining protesters were told to leave a street near the Evergrande offices while security forces stopped and recorded at least three people trying to tell a Reuters reporter about their experiences.
HIGH YIELDS AND GUCCI BAGS
Lured by the promise of returns approaching 12%, gifts like Dyson air purifiers and Gucci bags, and the guarantee from China's top-selling property developer, tens of thousands of investors have bought wealth management products through Evergrande. [L1N2QN2YG]
More than 80,000 people - including employees, their families and friends, and Evergrande real estate owners - bought products that grossed more than 100 billion yuan in the past five years, a sales director for Evergrande Wealth said in 2016 as a peer-to-peer (P2) online lending platform and was originally used to finance its real estate projects.
"We fear that we will be sacrificed," said a 34-year-old protester who works in e-commerce and only wanted to give her name Sophie for fear of reprisals from the authorities.
"It's fine for younger people like me, we can still make it back, but I worry about the older ones who put everything into this," she said.
Protesters and members of messaging groups of people who owe Evergrande money said they had been told by police not to cause trouble and their chat groups had been blocked.
Sophie said police had taken her to the station four times since joining the protests at Evergrande headquarters in nearby Shenzhen in September.
"We don't know what is going to happen to our money, but we are expected to keep silent, that's not right," she said.
