Recently, the news about Evergrande Property suing Evergrande Group to recover debts has attracted widespread attention. According to reports, Evergrande Property, as a subsidiary of Evergrande Group, has obtained a large amount of funds through a number of its companies and financing means. However, the funds were transferred to the account of Evergrande Group, and Evergrande Group failed to repay the debt on time, including the recovery of 2 billion yuan proposed by Jinbi Property. After investigation, it was found that this debt involved 13.4 billion yuan, which was divided into three parts: 2 billion, 8.7 billion and 2.7 billion. Before 2022, Evergrande Property had clearly asked Evergrande Group to repay the debt, but due to a series of reasons such as the suspension of Evergrande Group, the recovery could not be resolved. Although Evergrande has resumed trading, it has not yet formulated a repayment plan for the 13.4 billion yuan debt, and requires Evergrande Group to make full provisions.
As mentioned above, Evergrande Property has a complex interest relationship and capital flow behind the debt collection. Evergrande Property is a wholly-owned subsidiary of Evergrande Group, and there must be a close relationship between the two in terms of business and personnel. Although Xu Jiayin, the founder and controller of Evergrande Group, claimed to be ignorant of the debt and dissociated himself from the matter, it is hard to imagine that he has nothing to do with the debt because he owns more than 51% of Evergrande Property and 70% of Evergrande Group**. It also raises questions about whether Evergrande Property will succeed in recovering the funds.
In addition, Evergrande is currently in a serious insolvency situation, with a debt scale of up to 258 trillion, and its ability to service its debts is quite limited. Even if Jinbi Property eventually wins the lawsuit and asks Evergrande Group to repay the debt, it will be difficult to repay it in full in a short period of time. In addition, issues such as the true flow of funds, relevant agreements, and the proportion of return obligations can also be obstacles to the recovery of funds.
Despite the many uncertainties, from the perspective of Evergrande property management, it is undoubtedly a very necessary action for them to file a lawsuit to recover debts and reduce losses for the company. In addition to the possibility of recovering funds, this move can also explain to shareholders who invest in Evergrande Property, conveying Evergrande Property's serious attitude towards debt recovery.
It is worth noting that the legal process of Evergrande Property suing Evergrande Group may take some time, including the process of court review and case filing. Therefore, it is not surprising that Evergrande Group said that it has not received a notice from the court, which does not mean that the lawsuit has not actually been filed. Of course, this will also require further investigation and observation.
Through my understanding of this incident, I deeply feel that the debt problem in the business world is becoming more and more prominent, not only Evergrande Group, but also many enterprises are in a serious debt crisis. This not only directly affects the survival and development of enterprises, but also causes huge uncertainty and losses to investors and employees. For enterprises, proper financial management and debt risk control are crucial, and they should not blindly expand and rely on excessive financing. For regulators and investors, it is even more important to strengthen the supervision and risk assessment of enterprises to avoid the recurrence of similar incidents.
In this issue, Evergrande Property has set a valuable example for me by initiating a lawsuit to recover debts. Although the results are not yet clear, they have shown that they will do their best for the interests of the company and the interests of shareholders. This also hopes to provide some inspiration and thinking for other enterprises and shareholders, solve problems immediately, and actively protect their rights and interests, rather than passively accepting losses.
In conclusion, litigation and debt collection are a common means in the business world, but it is also a hopeful last resort. For Evergrande Property, the lawsuit is their efforts to recover their debts and their determination to find out the truth for the company. At the same time, it is also a warning to the management of Evergrande Group, reminding them to pay attention to the flow of funds and the repayment of debts, so as to avoid similar crises. Personally, I believe that in this context, companies need to pay more attention to standardized, transparent and responsible business practices to protect their own rights and interests and those of investors. At the same time, it is also necessary to strengthen the supervision and risk assessment of enterprises to avoid the recurrence of similar incidents.