A corporation that was formerly one of China’s largest property developers claims to have lost communication with a wealth manager who manages $313 million (£235 million) of its assets.
China Fortune Land Development claims that China Create Capital, a company registered in the British Virgin Islands, was meant to invest the cash on its behalf. It informed investors that the matter had been reported to Beijing police. After defaulting on billions of dollars in bonds, the company announced steps to restructure its obligations this month.
According to a document filed this week with the Shanghai Stock Exchange, one of Fortune Land’s overseas subsidiaries signed a deal in 2018 entrusting a company called Wingskengo Ltd. To provide investment management services to the property developer.
The lawsuit goes on to explain how Fortune Land transferred $313 million to China Create Capital as instructed by Wingskengo. The investment was projected to yield a yearly income of 7% to 10% until the deal expired at the end of 2022, according to Fortune Land.
Due to the industry’s debt issue, Fortune Land, like many other large Chinese real estate companies, has had its stock collapse in recent months. Due to its failure to meet its financial obligations, its Shanghai-listed shares have lost more than 70% of their value this year.
Fortune Land said earlier this month that a debt restructuring plan had been agreed by a group of creditors.
After defaulting on billions of dollars in bond obligations earlier this year, the deal presented a possible lifeline to the deeply indebted corporation.
Fortune Land is just one of China’s debt-ridden property developers that has come under fire since Beijing imposed a wide crackdown on the sector’s excessive borrowing last year.
Industry giant Evergrande, which is over $300 billion in debt and has lately defaulted on interest payments on certain offshore loans, is the most high-profile company to be engulfed by the problem.
Meanwhile, rival developer Kaisa, which has $12 billion in offshore debt, failed to repay $400 million in notes that were due to maturity last week.