Evergrande Gave Workers a Choice: Loan Us Cash or Lose Your Bonus

When the troubled Chinese property giant Evergrande was starved for cash earlier this year, it turned to its own employees with a strong-arm pitch: Those who wanted to keep their bonuses would have to give Evergrande a short-term loan.

Some workers tapped their friends and family for money to lend to the company. Others borrowed from the bank. Then, this month, Evergrande suddenly stopped paying back the loans, which had been packaged as high-interest investments.

Now, hundreds of employees have joined panicked home buyers in demanding their money back from Evergrande, gathering outside the company’s offices across China to protest last week.

Once China’s most prolific property developer, Evergrande has become the country’s most indebted company. It owes money to lenders, suppliers and foreign investors. It owes unfinished apartments to home buyers and has racked up more than $300 billion in unpaid bills. Evergrande faces lawsuits from creditors and has seen its shares lose more than 80 percent of their value this year.

Regulators fear that the collapse of a company Evergrande’s size would send tremors through the entire Chinese financial system. Yet so far, Beijing has not stepped in with a bailout, having promised to teach debt-saddled corporate giants a lesson.

The angry protests led by home buyers — and now the company’s own employees — may change that calculus.

Evergrande is on the hook to buyers for nearly 1.6 million apartments, according to one estimate, and it may owe money to tens of thousands of its workers. As Beijing remains relatively quiet about the company’s future, those who are owed cash say they are growing impatient.

“There isn’t much time left for us,” said Jin Cheng, a 28-year-old employee in the eastern city of Hefei who said he put $62,000 of his own money into Evergrande Wealth, the company’s investment arm, at the request of senior management.

As rumors rippled through the Chinese internet that Evergrande might go bankrupt this month, Mr. Jin and some of his colleagues gathered in front of provincial government offices to pressure the authorities to step in.

In the southern city of Shenzhen, home buyers and employees crowded into the lobby of Evergrande’s headquarters last week and shouted for their money back. “Evergrande, give back my money I earned with blood and sweat!” some could be heard yelling in video footage.

Mr. Jin said employees at Fangchebao, Evergrande’s online platform for real estate and automobile sales, were told that each department had to put monthly investments into Evergrande Wealth.

Evergrande did not respond to a request for comment, but the company recently warned that it was under “tremendous” financial pressure and said it had hired restructuring experts to help determine its future.

Things were not always this way.

For more than two decades, Evergrande was China’s largest developer, minting money from a property boom on a scale the world had never seen. With each success, Evergrande expanded into new areas — bottled water, professional sports, electric vehicles.

Banks and investors happily threw in money, making a bet on China’s growing middle class and its…