Kaisa Group announced the latest in a series of unexpected news today when the struggling China real estate developer revealed that its chief executive officer had resigned effective February 1st.
In a statement to the Hong Kong stock exchange, Kaisa said that CEO Jin Zhigang was leaving the company “to devote more time to his personal career development.” The announcement came less than two months after the company’s chairman, CFO and a third board member departed amidst a struggle with the Shenzhen government over allegations of ties to a fallen city official.
Today’s announcement is the latest surprise out of Kaisa after a widely reported buyout of the defaulting developer failed to materialise and the company instead announced yesterday that it would be selling four of its Shanghai projects to rival developer Sunac China.
Eleven-Year Veteran is Out the Door
Jin’s departure is likely to at least temporarily add to the confusion of creditors and regulators attempting to work out a solution for Kaisa’s woes, as it seems increasingly unclear who is running the program at Kaisa.
The company has yet to name a replacement for its now departed CEO, and new chairman Sun Yuenan only took up his position in December after former chairman and still-controlling shareholder Kwok Ying-shing appeared to to be pushed out over his alleged ties to former Shenzhen official, Jiang Zunyu. Jiang was put under investigation for corruption in October of last year.
Jin originally joined Kaisa in 2004 as sales and marketing director, and had been moved up to Group Co-President in 2010. The Peking University graduate was appointed CEO in 2012.
Rumours of Further Restructuring
With its CEO leaving with a few days of it selling four major projects to Sunac, rumours are flying that more change may be on the way for Kaisa.
Some reports are that Sunac’s acquisition of the four Shanghai project is a prelude to it taking over all of Kaisa. But other stories suggest that another developer, such as Shenzhen Overseas Chinese Town, could be in line to pick up Kaisa’s valuable Shenzhen projects.
Jin’s departure could also pave the way for the company to appoint someone more to the liking of the Shenzhen government.
With the future becoming increasingly muddy for Kaisa, investor confidence in the company’s ability and willingness to pay its debts has waned. The company’s $500 million in bonds due to mature in 2020 – the very notes that it missed a $26 million interest payment on last month – slid from 88 cents on the dollar back down to 75 cents on the dollar.