Evergrande Sells Out Shares in Shengjing Bank

On August 8th, a subsidiary of China Evergrande announced a public auction of the shares in Shengjing Bank it held. According to an auction platform, a total of 1.282 billion shares were auctioned, which are domestic shares with assessed price at 7.563 billion yuan.

Based on the total share capital of Shengjing Bank, the stake accounts for about 14.57%, which is all the shares of Shengjing Bank currently held by Evergrande. Since the real estate giant became a shareholder of Shengjing Bank in 2016, it has increased its holdings in 2019. By the end of 2020, the total shareholding ratio reached 36.4%, becoming the largest shareholder of the bank. In August and September 2021, Evergrande began to reduce its holdings, and Shengjing Financial Holdings, controlled by Shenyang State-owned Assets, surpassed Evergrande to become the largest shareholder.

Bank equity was once competed by the investment circle. After decades of QE (Quantitative Easing) in Communist China, there are mountains of over-issued currency and a large number of bad debts in the banking system, and most of the places where these indiscriminate currency flows are real estate. The real estate industry and banking finance in China are mutually dependent, and one side falls, the other side falls with it. Evergrande’s debt default since 2021 has brought to the surface the precarious situation of Chinese real estate companies. Real estate is linked with banking and finance, and now Evergrande sells shares in Shengjing Bank with both its hands burning, and it will be of no use to anyone who takes over. It will not change the fact that the Chinese economy is about to collapse.