Where did the 664.3 billion that Evergrande disappeared go?
Before Xu Jiayin was arrested, many media believed that the collapse of Evergrande was due to the tightening of policies and the change in China's real estate market, not the failure of Evergrande's operation, nor the failure of Xu Jiayin. But judging from the facts today, in order to let Xu Jiayin ensure the handover of the building with peace of mind, for the sake of social stability and unity, the above still did not break through the hole of Evergrande at one time.
Now, everything is clear and clear. The collapse of Evergrande was a complete failure in business and a personal failure of Xu Jiayin. The "three red lines" policy is just a fuse, which detonated the thunder of Evergrande in advance. If it continues, Evergrande's debt snowball will become bigger and bigger, and the consequences will be even more unimaginable.
After Evergrande's thunderstorm, its financial reports fell into difficult labor. However, after careful auditing, Evergrande released its 2021 financial report on July 17. In this earnings report, an extremely critical but not much attention is mentioned. Evergrande needs to reduce its operating income by 664.3 billion yuan at one time! This is not a small number, but a full 664.3 billion yuan!
Why is there such a large amount of money to be reduced? What's going on? The captain will give you a brief explanation. Normally, we sell something, pay with one hand, and deliver with the other. When someone else gets the goods, you get the money, and the deal is over. You sell $100 and you get $100 in revenue. But real estate is a special market, and it can be pre-sold. That is, you paid the money, the house has not yet been obtained, but Evergrande will include your money in the operating income. The criterion for Evergrande's revenue to be included in operating income is not the completion of the transaction, but the completion of the contract.
Under this operation, Evergrande only needs to get a pre-sale certificate, sell the off-the-plan, and do not need to build a building at all, and then incorporate the operating income into the statement. This creates a false boom. His deal was not completed at all, but his financial report is very good, and his annual operating income is hundreds of billions. With such a beautiful financial report, Evergrande can keep looking for bank loans. Look at me, the annual operating income is hundreds of billions, looking for you to loan tens of billions, are you afraid that I will not be able to pay it? The bank also thinks, your financial report is beautiful to death, the annual operating income is increasing rapidly, and the company's prospects are very good! There is no problem with loans, tens of billions of casual loans!
Does this business income standard comply with the law? I don't know. Perhaps there is a loophole in supervision that allows Xu Jiayin to exploit loopholes. Doesn't the bank want to see the flow? Isn't it to look at the income of the enterprise? Then make the flow bigger and the income bigger, isn't it "compliant"? But Xu Jiayin created these false prosperity not just to set up bank money. Evergrande's executives also directly divided the owner's purchase money.
Because the financial report is good, the income has increased greatly, and the profit has also increased greatly, isn't that a dividend to shareholders? Isn't this largest shareholder the Xu Jiayin family? Their family accounts for more than 70% of the shares, no matter how they divide it, their Xu family will take the lion's share. But if you want to pay dividends, you have to make a profit. But is Evergrande profitable? Actually, there is none. Remove this inflated 664.3 billion, how can Evergrande still have profits to dividend? These 664.3 billion are all the owner's purchase money, and the house has not yet been delivered, which was recorded by Evergrande in advance.
It's like opening a Taobao store and the goods haven't been delivered, but you not only collect the money, you spend it. When a customer comes to you for goods, you have neither goods nor money. Isn't this a scam? Evergrande is playing scams!
He sells the purchase contract to you, records your money in the financial report in advance, creates false revenue and false profits, and then directly divides your purchase money through large-scale dividends and falls into his own pocket. What is this not a scam? How much was divided? Almost took away more than 90 billion yuan, and the Xu Jiayin family took more than 50 billion. Where did the remaining 500 billion or so go? into liabilities. Some took it to buy land, some took it to football, mineral water, grain and oil. Xu Jiayin also established an Evergrande Song and Dance Troupe, and the dancers are all top-notch-looking, and their salaries are tens of millions every year. The owners' hard-earned money was thus ruined by Xu Jiayin.
Logically, illegal gains should all be returned! Xu Jiayin has long known that this money is illegal income. Therefore, he laid out in advance and transferred a large part of his pocket overseas, and the family trust fund set up for his son was 2.3 billion US dollars, equivalent to 16.7 billion yuan.
It's just that the captain has been unable to understand that since Evergrande was listed, PwC has served as the auditor of Evergrande Group for 14 years, is it really unable to audit Evergrande's financial problems, or is it shielding Evergrande Group? During the 14-year partnership, PwC earned at least 600 million yuan from Evergrande. Evergrande's financial fraud, does PwC really not have to bear any responsibility?
The world-renowned short-selling institution "Xiangrafter" saw the financial risks of Evergrande as early as 11 years ago, could it be that PricewaterhouseCoopers, which has first-hand financial information of Evergrande, does not know Evergrande better than "Rafter"? What is the point of auditing if a listed company commits large-scale financial fraud and the audit institution is not jointly and severally liable? What is the bottom line of ethics for audit institutions?
When we keep a close eye on Xu Jiayin and Evergrande, should we also pay close attention to audit institutions? Is there a dark tune? Can the joint and several liability of the audit institution be implemented?