China’s Debt-Ridden Country Garden Denies Reports That Founder, Chairwoman Have Fled China

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Troubled Chinese property developer Country Garden has denied claims that its founder and his daughter have fled the country after officials revealed that the firm has racked up billions of dollars in debt and will likely default on overseas payments.

The statement is in response to published reports that the firm’s founder, Yang Guoqiang, and his daughter, Yang Huiyan, who’s also the company’s chairwoman, fled the country as the company racked up debts of roughly 1.43 trillion yuan ($196 billion) as of the end of 2022.

“The founder … and the group’s chair of the board of directors are currently working normally inside the country,” the firm said in an Oct. 18 statement on its WeChat social media account, which was translated by The Straits Times.

“This rumor was posted with ulterior motives on multiple online platforms, causing a negative impact. We … reserve the right to take legal action over malicious rumors.”

The developer says it’ll likely default on an upcoming foreign debt payment obligation of roughly $60 million.

Ms. Yang took over as chair of Country Garden in March after her father—a former farmer and construction worker who founded the property giant in 1992—stepped down from the role, citing age-related reasons.

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 A residential complex built by Chinese property developer Country Garden in Nanjing, Jiangsu Province, China, on Aug. 31, 2023. (AFP via Getty Images)
A residential complex built by Chinese property developer Country Garden in Nanjing, Jiangsu Province, China, on Aug. 31, 2023. (AFP via Getty Images)

Country Garden Struggles to Repay Loans

She had been Asia’s richest woman after inheriting her father’s shares in 2007, with an estimated $34 billion fortune. Ms. Yang still holds 53 percent of Country Garden’s shares, The New York Times reported.

The reports that the top executives had fled the country surfaced after Country Garden stated last week that it had failed to repay a loan and would likely miss upcoming overseas debt payments—even in the grace period—as China’s ongoing property crisis continues to take its toll.

Officials said the property giant hasn’t yet made a payment due in the amount of HK$470 million (about US$60 million), citing, in part, adverse market conditions and a lack of sales.

The company stated that it had sales of about 154.98 billion yuan ($21.2 billion) from January to September, representing a decline of 43.9 percent from the year-earlier period.

Country Garden said in a statement that its failure to make the payment “may lead to relevant creditors of the Group demanding acceleration of payment of the relevant indebtedness owed to them or pursuing enforcement action.”

 The halted under-construction Evergrande Cultural Tourism City, a mixed-used residential-retail-entertainment development, in Taicang, Suzhou, Jiangsu Province, China, on Sept. 17, 2021. (Vivian Lin/AFP via Getty Images)
The halted under-construction Evergrande Cultural Tourism City, a mixed-used residential-retail-entertainment development, in Taicang, Suzhou, Jiangsu Province, China, on Sept. 17, 2021. (Vivian Lin/AFP via Getty Images)

China’s Real Estate Crisis

As a result, Country Garden says it has hired high-profile law firm Sidley Austin LLP to assess the company’s capital structure and liquidity position to formulate an overall solution.

“We wish to pursue a holistic solution to fully address the Company’s current offshore debt risk, to enable the Company to restore its business operations and achieve long-term healthy development and, to the greatest extent, protect the rights and interests of all stakeholders including customers, employees and creditors,” the company stated.

Country Garden also was due this week to make a $15.4 million payment in interest on an outstanding dollar-denominated bond but hasn’t yet commented publicly on the status of that payment.

Currently, the property firm has 15 outstanding public U.S. dollar-denominated bonds amounting to about $9.3 billion at maturity, including two bonds due in 2024, which are $965 million and $537 million, respectively.

Representatives of Country Garden didn’t respond by press time to a request by The Epoch Times for further comment.

Country Garden has been relying heavily on grace periods to avoid a debt default amid a volatile housing market and the Beijing regime’s real estate clampdown which has seen authorities move to curb the property industry in recent years, including tightening home-purchase rules and capping lending from banks while urging powerful property tycoons to pour resources and influence into backing Beijing’s interests.

Aldgra Fredly contributed to this report.

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