China property firm says 'has lost touch' with company it gave US$300 million

[BEIJING] A Chinese property company said on Thursday (Dec 16) that it cannot get in touch with a money management firm that it gave over US$300 million for investment, the latest example of the country's debt-crippled real estate sector's woes.

China Fortune Land Development said in a filing to the Shanghai Stock Exchange that it had recently "lost contact" with China Create Capital after handing over the money in 2018.

There was "no way to judge" how the missing cash would affect Fortune Land's current and future earnings, the filing said.

China's heavily indebted property firms have struggled to keep their heads above water since Beijing last year launched a sweeping crackdown on excessive leverage in the sector.

Real estate behemoth Evergrande - drowning in US$300 billion in debt - has been the highest-profile firm to become ensnared in the crisis, defaulting last week on more than US$1.2 billion of bond debt.

Fortune Land, a smaller player, defaulted on a US$530 million dollar bond in March, according to Bloomberg.

The developer said in the filing that one of its offshore units signed a deal in 2018 to let a firm called Wingskengo provide it with wealth management services.

On Wingskengo's instructions, Fortune Land then transferred US$313 million to China Create Capital so it could buy fixed-income products on its behalf.

But now the British Virgin Islands-registered China Create Capital has dropped off Fortune Land's radar.

Fortune Land has reported the matter to Chinese police, said the filing.

AFP