In recent years, in order to mobilize the initiative of employees and improve management efficiency, mainstream real estate companies have implemented co-investment systems to tie the interests of employees and the interests of the company in order to maximize profit growth and m

In recent years, in order to mobilize the initiative of employees and improve management efficiency, mainstream real estate companies have implemented follow-up investment systems to tie the interests of employees with the interests of the company, in order to maximize profit growth and make a lot of money in the rapid expansion of the industry. The bowl is full.

However, with the new "three red lines" financing regulations and the tightening of pre-sale funds, the superimposed debt repayment peak is coming, and the corporate capital chain is under pressure. In particular, the real estate market sales have also fallen into a downturn, and corporate profitability has declined sharply. Against this background, the co-investment system has also exposed many problems.

Recently, many real estate company employees reported to Hexun that there were problems with co-investment. For example, resigned and was unable to withdraw from the co-investment it had previously participated in. The project has met the liquidation conditions, but it has been unable to receive the principal. In addition, even if some real estate companies propose "paying off the housing with investment funds", it is difficult to gain the approval of employees.

After running blindly, the real estate companies left a lot of chicken feathers. The original intention of the co-investment system is to give profits to employees. However, when such high returns turn into high risks, should employees also bear the responsibility? Is the co-investment system just an industry? A blip on the rise? The "sequelae" of

's follow-up investment appears:

Some employees have been unable to get their principal back

"I am now urging the company to sign an agreement with me. I should have signed it when I resigned, but at that time the company said that the liquidation had not been completed and the amount of dividends had not been determined. , so it was postponed from March to now. "

The above agreement refers to the supplementary agreement . Xiaowen was optimized by the company in March this year. Her real estate company is based in Hebei, and its sales scale ranks among the top 30 in the industry. Previously, she voluntarily participated in the company's four projects as follow-up investors, with a cumulative investment amount of approximately 520,000. Except for the first project, which received dividends, the other projects have already met the liquidation conditions, but so far she has not received back her principal or dividends. The agreement

is the voucher for Xiaowen’s subsequent follow-up investment settlement. According to her, the proposed agreement probably includes information such as the time of her resignation, the amount of follow-up investment, and the dividends she should receive upon liquidation, but according to the template, the time for the return of funds may not be marked. According to

information, the three projects she invested in are located in Changsha, Xinyang, and Zhangjiajie. Except for one project with a follow-up investment of 100,000 yuan that received a dividend of 1,182 yuan, the other two projects basically received no dividends. However, Xiaowen said that she was lucky if she didn’t lose money, and it would be great if she could get her principal back.

There are many cases like this. On February 25 this year, an article titled "Shangkun Real Estate will not refund the investment!" appeared on Zhihu . 》post, according to the party concerned, the company forced the employee to follow a project in Hefei with a principal of 204,000 yuan, and received the first repayment in March 2021. The employee resigned in April, and in January 2022 When the second follow-up investment was paid back in January, the company refused to pay it back. The employee subsequently sent a reminder letter, but there was no reply as of the date of the revelation.

In addition to exit problems, the follow-up investment system also has problems such as institutional irregularities and debt-based follow-up investment. Xia Qing, a retired employee of , a leading real estate company, told Hexun that she participated in two co-investment packages in 2020. When resigned, the company stated that “since the establishment of the co-investment system, there has been no such thing as employee withdrawal. Her withdrawal application was rejected on the grounds of "exit mechanism". Another employee of the company also told the media that the company did not have clear regulations on the exit and liquidation of projects before.

This incident put a lot of pressure on Xia Qing, because she was a debt co-investor, and the company’s bottom line for co-investors was 150,000, but she only had 30,000. The company also introduced her to a financial management company, and she borrowed 120,000 yuan at an interest rate of 11%. Ten thousand. In this regard, she told Hexun that this financial management company is owned by the company. As a discount provided by the company to its employees, the loan approval speed is fast and it is not on the credit list.

Screenshot of Xia Qing’s company internal chat

Currently, Xia Qing’s status is a bit complicated. On the one hand, the progress of the project is unknown, and the company does not announce it regularly, so it is impossible to know whether it is profitable. On the other hand, she still has to be very high. Interest.

The real estate company where Xia Qing works has developed relatively steadily and is also in a leading position in the industry in terms of follow-up investment. According to her observation, most of the company's old employees are in favor of the co-investment system, because the previous co-investment system has indeed been very profitable.Another former employee of the company who did not want to be named told Hexun that after participating in the follow-up investment in 2017, the return on investment for and could reach 40%, and basically the capital would be recovered when the market opens.

Previously, the industry paid little attention to the standardization of the co-investment system itself, but the industry has taken a turn for the worse, and various flaws in the co-investment system itself have begun to be exposed. As of press time, Xia Qing’s company had not responded to Hexun Real Estate regarding the withdrawal from the co-investment system.

A board secretary of a listed real estate company ranked among the top 30 in the industry told Hexun that due to the balance of rights and responsibilities, risks and benefits, actions and supervision is difficult to establish in current enterprises, so there is currently no follow-up investment in the industry. Stereotyped approach.

Whether it is the delay in returning the principal and dividends, or the inability to withdraw from the co-investment project, these are the problems that the current real estate industry needs to solve in terms of the co-investment system. What's more serious is that as industry sales continue to be sluggish, construction of some projects is slow or even suspended. For many people, whether they can be liquidated as scheduled has become a question.

A few days ago, it was reported on the Internet that the employees who participated in the investment of a brand real estate company in East China received a notice asking the employees to withdraw from the investment and instead buy a house in a group and directly use the investment money to pay for the house. If they do not agree to withdraw, in view of the current situation, the company We will not be able to promise the time for returning capital and dividends.

Hexun asked the real estate company for confirmation, and the other party said that the matter was true, but the final plan has been revised. Judging from the information on the Internet, the main concerns of employees are that the houses provided by the company are unsaleable houses, and the prices are not low, and there are no discounts. In addition, whether the project can be successfully delivered is also a focus.

Related real estate companies have defaulted on their debts.

The capital chain is under pressure.

Why did not the principal and dividends be received in time? The company did not provide an explanation to Xiaowen. However, she estimates that it will be difficult because the company has no liquid funds in its account and there is no way.

From the perspective of capital path, the principal and dividends of co-investment projects are generally completed by different entities. Dividends are distributed by the project company using operating profits, and the principal has been transferred back to the headquarters capital pool when the project cash flow returns to positive. . Xiaowen said that it is a common practice in the real estate industry to allocate project funds for continued investment.

However, the regulatory agencies strengthened the supervision of pre-sale funds in August 2021. At the same time, the "three red lines" and banks have imposed strict restrictions on corporate financing. Superimposed on the concentrated debt maturity, companies have encountered unprecedented cash flow Crisis, therefore, it is impossible to return the funds invested by employees in a timely manner.

According to Hexun, Xiaowen’s company has already defaulted on its debt in December 2021, and is actively promoting an exchange offer for US dollar bonds and extending debt. According to the financial report, the company will pay 49.08 billion yuan in cash to repay debt in 2021, and the net cash flow generated from financing activities will be 6-24.29 billion yuan.

Xiaowen’s company officially launched the co-investment system in 2017. At that time, my country’s commercial housing sales exceeded 13 trillion, with a growth rate of 13.67%, which was the peak growth rate of real estate in the past five years. This year, the enthusiasm of real estate companies to implement the co-investment system has also reached a climax. According to public reports, nearly half of the 17 100 billion real estate companies have launched a co-investment system, such as Vanke , Country Garden and other leading real estate companies. The co-investment system has become a benchmark for the industry to learn from.

Nowadays, real estate companies that have launched follow-up investment systems and achieved rapid growth have experienced severe debt defaults. Based on the current status of the real estate industry, it has become a fact that real estate companies are strapped for funds.

The industry as a whole is highly dependent on debt renewal. Du Lihong, a partner of Beta Consulting, believes that due to the general lack of long-term funding channels for domestic real estate companies, 96% of listed real estate companies currently face the problem that the debt period is shorter than the investment recovery cycle. The average period The gap reaches 15 months.

How bad is the liquidity of real estate companies? According to statistics from CICC, from January to May 2022, 25 domestic real estate bonds have been extended. CRIC statistics also show that from June to July 2022, the total maturity scale of domestic and foreign bonds of 200 core real estate companies will be approximately 175.5 billion yuan. In the context where creditors cannot repay their funds, it is naturally difficult to return the funds invested by employees.

The improvement of the tight financial situation of real estate companies ultimately depends on the market recovery. Sales collection is the main way for real estate companies to recover cash. At the same time, only a recovery in sales can suppress the decline in housing prices, activate the land market, and ultimately realize the real estate market. a virtuous cycle.

Data from the Bureau of Statistics show that from January to May, sales of commercial housing were 4,833.7 billion yuan, a decrease of 31.5%. The property market is close to bottoming out, which is the industry's consensus on the real estate market. A few days ago, Vanke Chairman Yuliang said at the shareholders' meeting that in the short term, the market has bottomed out, but recovery is a slow and moderate process.

The industry believes that with the continuous introduction of loose policies, there is a high probability that efforts will be made to support residents' reasonable housing needs and direct financing by real estate companies, and the property market is expected to usher in an inflection point in the second half of the year.

Should you trust the company or seek legal help?

How to protect the rights and interests of employees?

There is no doubt that the project exit conditions have been met. Regardless of whether profits or losses are made, they should be returned to employees as soon as possible. Jia Ruiguo, a lawyer at Beijing Fangli Law Firm, told Hexun that if employees followed the investment and the company failed to return the principal and income as agreed, it would definitely constitute a breach of contract and infringe on the rights and interests of employees. The company should bear responsibility in accordance with the agreement signed by both parties.

According to Hexun’s observation, so far, at least one East China brand real estate company and two Fujian brand real estate companies have launched a plan to “deduct house payments with follow-up investments”. As for the specific content of the plan, it is still unknown. However, Jia Ruiguo said that if the company uses housing to pay off debts, employees can comprehensively consider whether it is appropriate, and this is a matter of negotiation between the two parties.

The person in charge of the above-mentioned brand real estate company in East China told Hexun that from the perspective of purely solving the problem, this current approach is reasonable. In the current industry environment, it is almost impossible to satisfy everyone. We just provide employees with one more solution to try to solve the problem. Another way to deal with

is to sign a new supplementary agreement with the company and agree on a new repayment method for the principal and dividends that cannot be repaid on time. This requires special attention to the provisions on the repayment date. Jia Ruiguo reminded that if the company signs a supplementary agreement and only agrees on the specific amount of follow-up investment and return of profits, it will be regarded as a confirmation document at most. If there is no specific payment time, the employee can file a lawsuit in court accordingly.

Regarding exit arrangements, Wu Jiejiang, partner of Beijing Jingtian & Gongcheng Law Firm, reminded that employees need to further understand the exit arrangements of co-invested projects on the basis of distinguishing between equity investments and debt investments, such as the repayment of debt investments. The setting of payment time and default liability for overdue repayment; whether there is a repurchase entity for equity investment, distribution time, distribution conditions, etc. If the investment is entrusted, you also need to pay attention to how the company ensures that employees receive investment returns after exiting.

The main body of employee follow-up investments has a special identity - employees. Wu Jiejiang reminded that attention should be paid to the arrangements for exit from follow-up investments in cases of resignation, dismissal, etc. In practice, some companies adopt an internal co-investment system to stipulate this, but internal regulations are usually not stamped by the company, making it difficult to confirm the validity of the text.

He suggested that when signing the text, employees should request that the co-investment arrangements in the event of resignation, dismissal, etc. should also be signed and confirmed with the relevant parties in the form of a contract or agreement. In addition, the most important thing is to keep the original signed transaction documents, investment payment bank receipts and other investment documents.

Xiaowen believes that getting money is a dilemma. If you don't sue, there is no hope of getting your money back. But if you sue, you will have to take the former leader to court, which may affect innocent people. Her current idea is to negotiate with the company. "My colleagues have not heard of anyone preparing for litigation, and they all still have hope for the company."

Jia Ruiguo gave suggestions from a legal perspective regarding employee participation in follow-up investments. Employees should set up a regulatory department to prevent the company from misappropriating funds. When participating in follow-up investments, the company's credit standing should be considered. If the company has a large amount of debt and cannot ensure the safety of funds, employees should decisively refuse.It is difficult for

projects to make profits.

The co-investment system may be gradually withdrawn.

"I stopped following the investment later because I believed that if it was not sold out, it would basically lose money." An employee of a thunderous real estate company told Hexun that in 2017 After that, he stopped following the investment because he felt that it was getting harder and harder to make money in the industry and the risk of loss was high.

Comprehensive 2021 financial report data shows that among the 50 mainstream real estate companies, only 13 real estate companies have positive net profit growth rates, and the remaining 37 real estate companies have negative net profit growth rates. The average industry net profit growth rate is -18.34 %. Land prices and de-financialization of real estate have limited the profit margins of real estate companies. The China Index Academy judged that the industry has been in a low-profit stage for a long time.

Against the background of declining profits, developers are also upgrading their investment mechanisms. For example, Vanke has canceled the special inferior mechanism in the latest version 6.0 of its co-investment system, and the effects of the upgrade are still unknown. However, the financial report shows that the total subscription amount of Vanke's co-investment projects dropped from 10.64 billion yuan at the high point in 2017 to 3.127 billion yuan in 2021, a drop of 70%.

In the era of real estate blindfolded and running wild, the co-investment system has played a big role. The premise of profit growth also ensures that companies and employees can realize benefit sharing. However, when the risks of the co-investment system increase, can employees be forced to The risk must be taken with the company, which is obviously an issue to be discussed.

In the current co-investment system, many companies have set up mandatory co-investment systems for specific personnel. Article 150 of the " Civil Code " stipulates: If one party or a third party uses coercion to cause the other party to perform a civil legal act against its true intention, the coerced party has the right to request the People's Court or arbitration institution has been revoked. After the co-investment dispute occurred at

, some employees believed that the co-investment system was coercion by the company rather than their voluntary behavior, and they had the right to revoke it. In this regard, Wu Jiejiang said that coercion generally considered by law generally includes the following two situations: (1) coercion with the intention of causing damage to the life, property, reputation, freedom, and credibility of the person being coerced; (2) Coercion involves directly committing illegal acts against the person being coerced or his relatives and friends, causing damage to the life, property, reputation, freedom and credibility of the person concerned and his relatives and friends. Therefore, simply because there is a labor relationship, the company cannot be deemed to have committed coercive behavior. Secondly, if employees believe that the company does engage in coercive behavior, they need to provide corresponding evidence.

Li Jianteng, global managing partner of Oliver Wyman, believes that co-investment is an innovative incentive method and is the product of the industry's development to a certain stage. Previously, the property market was good and most projects were profitable, but project management was relatively loose and management was The degree of sophistication has a greater impact on project profits. As a supplementary management measure, bundling employees with project interests can increase profits. This is a win-win situation.

However, many projects today are losing money and the cycle is lengthening. Employees have doubts about when or even whether they will get their principal back. Li Jianteng believes: "The risks and rewards of co-investment have undergone a fundamental change. Returning to the essence of incentives, it is nothing more than making efforts and rewards correspond. But after all, employees are not the owners of the company, so it is impossible to let them go Bear the same risks as the boss or shareholders. "

" In the long run, fewer and fewer companies may use the co-investment system in the real estate industry. " Li Jianteng believes that, like the co-investment version released by some companies now, Similar to long-term options, but you have to spend money to buy them. Industry returns are no longer attractive. The co-investment system actually overlaps with options, bonuses, and even equity, and is not mandatory.

(Note: At the request of the interviewee, Xiaowen and Xia Qing in the article are pseudonyms.)

END