Recently, Evergrande Automobile has ushered in a series of heavy blows, indicating that its prospects are worrying. Since Xu Jiayin**, Evergrande's fate seems destined to face a severe test. In this eventful autumn, the latest news shows that after Xu Jiayin, the eighth senior executive of the Evergrande department has been arrested, and this muddy water has become more and more unfathomable.
Investment plans collapsed: Newton Group's mutation
In August last year, Newton Group announced a high-profile investment in Evergrande Automobile, planning to invest 4 billion yuan in exchange for 275% stake. This investment is pinned on high hopes and is considered a lifesaver for Evergrande Automobile. However, the latest news revealed that Newton Group's share subscription agreement has expired at the end of 2023, which means that the original plan for a capital injection of 4 billion yuan has completely failed.
It is worth noting that the identity of the Newton Group has also raised questions. It is known as a Middle Eastern company, but Newton Group boss Wu Nan and executives are Chinese and have close ties to Wang Wenyin, the founder of China's Zhengwei Group. The revelation has raised more questions about Evergrande's financial operations, and there are fears that this may be just the tip of the iceberg.
High-level setbacks: President Liu Yongzhuo's surprise attack
When the investment plan failed, Evergrande Automobile ushered in a more fatal blow: Liu Yongzhuo, the company's president, was criminally detained on suspicion of violating the law and committing crimes. Liu Yongzhuo has always been a key figure in Evergrande Group, and after joining Evergrande in 2003, he was in charge of several Evergrande subsidiaries. He has been responsible for a wide range of businesses, from football clubs to cultural industries, to agriculture and animal husbandry groups and internet finance groups, demonstrating his control over Evergrande's diversified businesses.
In recent years, Liu Yongzhuo has been personally entrusted by Xu Jiayin to be responsible for Evergrande's automobile business. However, with his **, the company's leadership was once again in turmoil. This not only puts tremendous pressure on the company's operations and decision-making, but also makes the market more pessimistic about the future of Evergrande Automobile.
Profound financial crisis: Evergrande Automobile's predicament
Evergrande Automobile has accumulated losses of 84 billion yuan in the past two years, making it one of the representatives of the largest losses of domestic new power car companies. As of the end of 2022, the company's total liabilities have reached 18387.2 billion yuan, while the total assets are only 1152200 million yuan, the situation of insolvency is obvious. The severity of this figure is not only reflected in the company's internal business difficulties, but also directly affects the feasibility of delivery.
It is worth noting that Liu Yongzhuo previously said that the delivery volume of Hengchi 5 has increased steadily, but did not disclose the specific delivery volume. According to some clues, due to financial and market reasons, the delivery of the Hengchi 5 was only a little more than 1,000 units, which was in stark contrast to the previous publicity. Not only is this a blow to the company's reputation, but it also makes investors question the company's financial transparency.
Executives were arrested at all levels: Evergrande's department fell into a huge crisis
Liu Yongzhuo's ** is the ninth case of Evergrande executives being arrested. Prior to this, Chief Financial Officer Pan Darong, Executive President Ke Peng, Wealth General Manager Du Liang, Life Chairman Zhu Jialin and other high-level people were taken away for investigation. In addition, Xu Jiayin and his second son Xu Tenghe were also involved in illegal issues.
This series of arrests of senior executives shows that Evergrande has fallen into a deep predicament from the inside out. The fact that so many senior executives have been investigated one after another shows that the company's internal and external business problems have slipped into an irreparable situation. The alleged illegal acts of the senior management may be a signal of a wide range of violations and serious facts, and paint a picture that is not optimistic for the outside world.
Family Escape Draws Attention: The Bizarre Story Behind the Power
In addition to the company's internal problems, Xu Jiayin's family story has also become the focus of attention from the outside world. Although Xu Jiayin was arrested, through a "technical divorce", his wife Ding Yumei fled overseas with tens of billions of funds, and Xu Jiayin's son also has a huge family trust**, worth 2.3 billion. This has drawn attention to the bizarre stories behind power.
Compared with the escape of these family members, those buyers who failed to get the property, the ** merchants who failed to get the money back, and the creditors who failed to recover the funds are in a more difficult situation. This disparity is deeply unfair and highlights the enormous harm that internal problems can cause to external partners and investors.
In such a crisis, one can't help but reflect on whether this is a deficiency in risk control and regulation of the entire industry. Evergrande Auto is not just a company, but a huge business ecosystem, and its collapse could have a knock-on effect on the entire industrial chain. This has also raised questions about the regulator's ability to effectively supervise and control emerging industries.
This series of events has undoubtedly cast a heavy shadow on the future of the entire Evergrande Automobile and Evergrande system. In addition to the listed company of Evergrande Automobile, which is concerned by the market, a number of subsidiaries of Evergrande are also facing considerable risks. However, its financial crisis and setbacks at the top have unveiled the shady curtain within a huge consortium, raising more profound questions about the credibility and corporate governance of Chinese entrepreneurs.
In this turbulent time, prudent risk management and a deeper understanding of corporate governance structures are even more important for investors. At the same time, regulators should also strengthen supervision of enterprises in emerging industries, especially those large conglomerates, to avoid the recurrence of similar crises.
Overall, this turmoil is not only a crisis for one company, but also a warning for the entire industry. Through this troubled water, we may be able to see more clearly the fragility of the development of China's emerging industries and the loopholes in regulation. How to maintain the integrity and responsibility of entrepreneurs while the market is booming, and how to promote the sustainable development of China's economy in the balance between regulation and development are serious issues before us.