2015-01-08

From Cheer to Fear

How quickly sentiment shifts, and this isn't even a bear market. Yet.

There's a Leadership Crisis in Chinese Property Firms -- They're Defaulting. Who's Next to Go?
The loan default by Kaisa Group Holdings Ltd., after the second surprise exit of a Chinese property tycoon in six months, is prompting investors to ask who’s next.

...In February, Glorious Property Holdings Ltd.’s chief executive and chief financial officer quit after shareholders rejected billionaire Zhang Zhirong’s move to take the builder private. The company’s 2018 notes slid for four straight months through May, and remain down at 68 cents on the dollar.

Agile Chairman and founder Chen Zhuolin was released in December after being held under house arrest in the southern city of Kunming since Sept. 30, according to company filings. He never surrendered his title during that period.

...Kaisa, which had said on Dec. 10 that Kwok would resign for health reasons at the end of December, will make an announcement regarding its debt situation at the right time and won’t reply to media requests for comments...
As for a leadership crisis though......the Chinese press is replete with stories of company bosses high tailing it. By comparison, the trouble at listed developers is a small matter.

Here's the Baidu search index for 跑路, the term most often used to describe bosses who have fled, lost contact, absconded with company funds, etc. It peaked in 2011 when there were lots of bosses from Wenzhou disappearing, but it climbed steadily through 2014.

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