Embattled property giant denies founders left China amid default fears

Chinese property giant Country Garden has denied its founder and chairwoman had fled the country, as the debt-saddled builder flirts with a default that could send shockwaves through the industry.

One of China's biggest developers, Country Garden has racked up debts estimated at 1.43 trillion yuan ($196 billion) as of the end of 2022.

Unverified reports in Chinese financial media this week claimed founder Yang Guoqiang and his daughter Yang Huiyan — the company's chairwoman — had left China.

But the firm quashed the speculation on Thursday, saying "the founder... and the group's chair of the board of directors are currently working normally inside the country".

"This rumour was posted with ulterior motives on multiple online platforms, causing a negative impact," the firm said in an online statement.

"We... reserve the right to take legal action over malicious rumours," it added.

Defaulted in 2021

Yang Huiyan took over as chair of Country Garden in March after her father stepped down from his position on the board.

But her company is now on the frontlines of China's property crisis that has seen a string of debt-laden builders either defaulting or threatening to do so.

Bloomberg News reported last month that the billionaire boss of beleaguered builder China Evergrande — which defaulted in 2021 — was being held by police.

Country Garden was due Wednesday to repay $15.4 million in interest but had not given an official indication of whether it had done so by Thursday.

Sales slump

Multiple news outlets, citing bondholders and anonymous sources, reported that the company had missed the deadline, putting it at risk of default.

Country Garden did not immediately respond to an AFP request seeking confirmation of the missed payment.

But the firm told Bloomberg on Wednesday that it "expects that it won't be able to meet all of its offshore payment obligations on time".

It blamed its struggles on "a deep correction in China's home market and its subdued sales".

Country Garden had 148 billion yuan in cash as of the end of June but it said it intends to use that to complete unfinished housing projects whose units were sold in advance, a common business model in China's property sector.