On June 11, Evergrande Auto released a significant announcement. According to the announcement, the factory land of Evergrande Auto may be reclaimed, and the production and sales of Evergrande Auto will be forcibly stopped.

These two heavy punches, one from Guangzhou and the other from Tianjin, effectively declared a "freeze" on Evergrande Auto.

The fact that both the north and south regions have taken action against Evergrande Auto indicates that Evergrande Auto may have significant moves ahead.

Guangzhou: Compulsory reclamation of factory land, buildings, and equipment to offset 1.9 billion yuan in subsidies

On May 22, Evergrande Auto announced that relevant government departments had requested it to refund 1.9 billion yuan in incentives and subsidies. At that time, Evergrande Auto claimed that it would negotiate with government departments to strive to revoke the requirement for Evergrande Auto to refund 1.9 billion yuan.

On June 12, Evergrande Auto announced the punishment regulations of government departments, and Evergrande Auto can apply for administrative reconsideration. Currently, even if Evergrande Auto applies for administrative reconsideration, it may still be difficult to change the administrative punishment decision.

From May 22 to June 12, there were only 16 working days in between, and the relevant departments issued the punishment decision with high efficiency and firm determination.

According to the punishment decision, Evergrande Auto's factory land in Nansha was forcibly reclaimed, and the buildings and equipment on the land were used to repay the incentives and subsidies.

Why is Guangzhou so harsh on Evergrande this time? There is some personal sentiment involved.

Guangzhou introduced Evergrande Auto to settle in Nansha, intending to make a big splash in new energy vehicles and revive the city's automotive prowess. This is related to Guangzhou's status as a first-tier city.

Its plan is to create a strategic layout of "three cars and one park." "Three cars" refer to GAC Toyota, Evergrande New Energy, and GAC NIO. GAC Toyota will build Toyota's most concentrated production base in Nansha, contributing to the existing hundred billion yuan in output value (including auto parts companies). "One park" refers to the autonomous driving and intelligent transportation demonstration zone, supported by the provincial transportation group, Nansha is building an autonomous driving industry test zone with the highest national standards, optimal configurations, and the best technology.

Unexpectedly, after Xu Jiayin's Evergrande Auto arrived, it occupied the position without delivering, completely disrupting Guangzhou's industrial policy. In addition, coupled with the increasingly weak GAC, Guangzhou's automotive industry is on the decline. The status of Guangzhou as a first-tier city is in jeopardy. With new and old grudges, it's high time to take action against Evergrande Auto to stop the losses!

Xu Jiayin is truly a sinner to Guangzhou!

Tianjin: Ordered Evergrande Auto's Tianjin factory to stop production and sales, with resumption depending on rectification progress

After Guangzhou took action, Tianjin quickly followed suit in dealing with Evergrande Auto.

According to the announcement, Tianjin proposed rectification orders after investigating Evergrande Auto. Before the rectification is completed, it plans to order Tianjin Evergrande to stop producing and selling new energy passenger car products and carry out rectification. During the rectification period, the department will suspend accepting Tianjin Evergrande's new energy passenger car product declarations and electronic information transmission of new energy passenger car product certificates, and will resume once the rectification is completed and passes the review to meet production access conditions.

Although Evergrande Auto has already stopped production and sales, voluntarily stopping and being passively stopped are two different things.

Tianjin's active suspension of Evergrande Auto's production and sales activities has effectively frozen Evergrande Auto's qualification as a business entity to continue operating. In other words, it has essentially stopped Evergrande Auto's potential for "disruption" in the market.

This measure can be interpreted as a protection of Evergrande Auto's production qualification. As everyone knows, the authorities will not issue new automobile production qualifications nowadays, and Evergrande Auto's production qualification is a good intangible asset. Evergrande Auto's production qualification can fetch a good price.

Dismantling the Evergrande landmine, Evergrande Auto enters countdown

Guangzhou and Tianjin taking action against Evergrande Auto is almost a clear sign that the higher authorities have begun dismantling the Evergrande landmine. Without approval, the north and south regions would not have taken urgent action. The first step in dismantling Evergrande is to dismantle its most "valuable" assets.

It should be noted that in addition to failing to fulfill commitments to local governments, Evergrande Auto also involves numerous banks, trusts, and other financial institutions, suppliers of Evergrande Auto's factories, and homebuyers of unfinished buildings in Evergrande Auto's real estate sector.

It is certain that Evergrande Auto's factory land has been mortgaged for financing, and financial institutions will surely be confused when Guangzhou forcibly reclaims the factory land.

In fact, due to the huge debt and cross-guarantees involved in the Evergrande landmine, as well as situations like double mortgages, it is almost unsolvable within the existing legal framework.

To resolve the Evergrande landmine, it is necessary to jump out of the existing legal framework.

Here, I believe that a principle should be followed, namely the principle of interest prioritization, that is, whose interests come first, whose interests come second, and so on. Those mortgages, guarantees, commercial bills, etc., should all be put aside. Only in this way can we hope to resolve the Evergrande landmine.

As for whose interests should be put first, I believe that homebuyers, small and medium-sized suppliers, taxes, fines, etc., can be placed first.