Evergrande Wealth Management sold products to its own staff, then defaulted

Evergrande Wealth Management, a Shenzhen-based subsidiary founded in 2015, sold short-term investment products advertised as backed by Evergrande's property projects and paying yields around 7–12%. Over five years it raised more than 100 billion yuan from over 80,000 buyers. A large share of those buyers were Evergrande's own employees and suppliers: staff described being told their bonuses or continued good standing depended on buying the products, and sales offices ran promotions with gifts like Dyson appliances and Gucci bags for large purchases.

Evergrande used the wealth unit as a channel for short-term financing while its property business was already under severe liquidity strain. It kept selling products into 2021 even as signs of the group's distress became public, raising cash from the people least able to walk away — its own workforce, who risked their jobs by refusing and their savings by buying in.

In September 2021, as the broader group missed payments, Evergrande Wealth stopped repaying investors on schedule. Protesters gathered at company offices demanding cash, and the company offered discounted apartments, offices and parking spaces as partial payment instead — an offer most investors rejected. By the end of 2021 roughly 40 billion yuan remained outstanding; more than 30 billion yuan was still unpaid as of August 2023, when Evergrande told investors it could no longer meet its obligations.

In September 2023, two weeks after the unit again missed payments to investors — the clearest sign the channel that had funded the group was no longer operating. China Evergrande Group was ordered into liquidation by a Hong Kong court in January 2024, and in 2024 the wealth unit demanded that current and former managers return commissions and bonuses tied to the products they had sold, to help cover the shortfall.

Used staff as captive buyers to fund a liquidity gap, then defaulted on ~40B yuan ($6B) to 80,000+ investors, offering discounted real estate instead of cash.

Evergrande used a captive sales channel — its own staff — to raise short-term cash for a developer already illiquid, rather than investors who could weigh the risk on their own.

Sales kept running through 2021 even as the parent group's distress became apparent, so the newest buyers took on the freshest risk with the least warning.

Employees selling and buying the products faced pressure tied to bonuses, which blurred the line between an investment decision and a condition of keeping their job.

When the unit stopped paying, it offered discounted real estate instead of cash — an asset swap that shifted the group's own inventory problem onto retail investors who had asked for a fixed return.

A captive sales channel into your own employees is not a safer source of financing — it just moves the risk of insolvency onto the people with the least power to refuse.

More than 30 billion yuan remained unpaid to investors as of August 2023., and China Evergrande Group was ordered into liquidation by a Hong Kong court in January 2024. In 2024 the wealth unit told current and former managers to return commissions and bonuses earned on the products to help fund repayment.