When your news organization runs an exposé that is immediately followed by a sit-in from 60 employees of the company being covered, if you have any journalistic instincts at all, you realize you’ve probably hit on something. This is what happened to the offices of Watching, a news website that is partially owned by Alibaba Group, when they reported that the Chinese company Zhouda New Materials Technology was promising 20-30 percent returns on four-year loans.
The high rate of returns promised on these financial products has raised some eyebrows, especially in the context of the history of illegal financing schemes that have been coming out of China in recent years. Zhuoda New Materials Technology has apparently raised money through these high yield products from 400,000 investors and now questions are arising as to how exactly these returns are possible. In response to these questions, Yang Zhuoshu the president of Zhuoda Group, the parent company of Zhuoda New Materials Technology, has posted images of a contract purporting to demonstrate the potential for his company to earn $94 billion a year through an agreement with Russia to provide 3D printed houses.
In what I can only interpret as efforts to out-Trump the Donald, Zhuoshu’s response to questions has ranged from angry diatribes to office invasions to simply hanging up on reporters. A video message released to clients included this message from the mercurial magnate:
“Who says my business can’t be bigger than Chinese trade data? My business is responding to general secretary [Xi Jinping]’s call to open the Russian market. If you oppose this, then you oppose our supporting Russia’s national construction. You have an opinion about Putin, you hate him. You hate the party central. Then go find the party Central Committee, or go find Putin. Don’t talk to me about it.”
When Watching reported that the financial affairs office of the Hebei provincial government was investigating these fundraising tactics, they received a 12-hour visit from 60 of Zhuoda’s employees who refused to leave until they were finally persuaded to do so by police intervention.
The Financial Times made an effort to follow up with both the local government agency and with the beleaguered corporation. Unfortunately, the financial affairs office has not responded, but a FT reporter was able to speak on the phone, albeit briefly, to someone in the Zhuoda organization. The reporter questioned the legality of the loans and asked for figures on the amount borrowed, but instead of an answer, they were met with a dial tone as the representative hung up the phone.
“I could just do nothing because I have no money. But I want to do stuff; I want to develop our ethnic [Chinese] industry, so I have to raise financing. Stop talking about [Rmb]10bn or 100bn–it doesn’t matter, I can repay it.”
Naturally, this has not gone very far toward alleviating suspicion–and if this is Mr. Yang’s idea of triage–I think we can all be grateful that he is not a surgeon.
Are these home worthwhile? Let’s hear your thoughts in Economics of 3D Printed Homes forum thread on 3DPB.com.