HONG KONG — Just before payday, an email was sent to employees by senior managers: Give us your money, and we’ll make it worth it.
It was one of many arguments for HNA Group, a Chinese conglomerate struggling with an estimated $90 billion in debt amassed during a global shopping spree that included buying stakes in multinationals like Hilton Hotels and Deutsche Bank.
The company, in an email, advertised an “employee treasury” product with an 8.5% return if workers handed in $1,500. A similar hung 9 percent. A third mentioned a return of up to 40% if employees owned $15,000.
These locations, more than a dozen of which were reviewed by The New York Times, were not part of an employee stock ownership program. Instead, they appear to be high-interest loans, with the company as the borrower and its employees as the lenders.
HNA’s overtures to its employees come at a difficult time for many of China’s biggest traders. The company is part of a group of large Chinese companies government sanctioned for making splashy overseas purchases of hotels, cinemas and film production companies. The resulting debt among aggressive buyers grew so large that Beijing saw it as a threat to the wider economy.
HNA faces its own financial pressures. The conglomerate has seen its borrowing costs rise sharply in the global bond market in recent months, a sign that some investors are increasingly worried about the company’s ability to service debt. Seven public companies under the HNA umbrella have suspended trading in their shares, suggesting big announcements that could affect key companies are underway. The company is also beginning to sell assets.
In a recent interview with Reuters, its chairman, Chen Feng, recognized financial difficulties and vowed to overcome them.
It is unclear how much money HNA collected from employees. The company has long offered such investments to its employees to motivate them and share in the company’s success, HNA attorney Thomas A. Clare said in an email.
“HNA has never approached offering these products and opportunities as a funding mechanism, as the amounts contributed by HNA employees to these opportunities represent a very small percentage of the funds raised,” he said.
Companies around the world allow employees to buy shares or offer other ways for workers to invest in the company. But HNA locations do not offer a direct stake in the business.
The offers examined by The Times had similar characteristics, namely high yields for financing certain operations.
In an email dated Jan. 4, an HNA unit told employees it needed nearly $8 million to fund a duty-free business. He announced an annualized interest rate of 9.8%. A week later, HNA’s media and entertainment arm said it was looking to raise nearly $80 million from employees, promising strong returns and a plan to grow the business.
Some emails asked for big investments, while others emphasized how little employees need to invest to be eligible for big returns. An email, dated Jan. 17, offered commissions to employees who referred friends and family.
“If you successfully invite someone else to invest in fixed-term wealth management products,” the email told employees, “you can get a high commission.” The email did not specify.
During a seven-day period in January, an HNA employee received seven separate presentations. Mr Clare said any increase would be the result of trying to entice more employees.
Chinese companies have often turned to individual investors or their own workers to raise funds. But such moves, some Chinese financial experts say, can signal trouble.
“It’s a desperate measure when companies really have no other source of funding and they’re stuck,” said Anne Stevenson-Yang, co-founder of J Capital Research, a corporate research firm.
A small company in Wenzhou City, Southeast China, called Wenzhou Liren Educational Group made national news in 2011 after going bankrupt and being unable to pay nearly $790 million, it borrowed from local employees and residents. In 2015, a peer-to-peer online platform called Great Group pressured employees to buy investments to raise funds when it hit a financial stalemate, media widely reported. Chinese. The two companies did not respond to requests for comment.
“Internal financing is a common way for companies to raise funds,” said Sun Lijian, associate professor at the China Center for Economic Study at Fudan University in Shanghai.
“But employees shouldn’t be forced to contribute and they should be made aware of all the details of the project, including the risks,” he added.
Fundraising from workers is legal in China if an employer clears regulatory hurdles, experts say, particularly permission from the country’s central bank. The People’s Bank of China did not respond to a request for comment.
Companies that raise funds directly from Chinese investors must obtain licenses from securities, insurance or banking regulators. The HNA submissions reviewed by The Times did not say whether they had been reviewed by regulators.
Mr. Clare, HNA’s attorney, said the bids complied with all laws and referred questions to various Chinese regulatory agencies, which did not respond to requests for comment.
HNA sometimes directed its employees to Jubaohui, its online investment portal, usually open to Chinese investors. The portal also has a space reserved for employees. Publicly, HNA often positions itself as a major player on the move, with talented leadership and vast resources at its disposal.
Jubaohui has struggled to repay some investors, according to an email sent to an investor and reviewed by The Times. He promised to pay later at a higher interest rate, after he was unable to make final payments on two investments late last year.
Payments were finally made, said the employee who received the email. The Wall Street Journal reported earlier a similar problem with a different HNA investment.
Mr. Clare, HNA’s attorney, said, “In the absence of specific evidence that Jubaohui was in fact late in making a required payment, there is no basis for any such statement or speculation.”
As HNA faced increasing questions about its operations from local and foreign media, the company issued group-wide emails urging employees not to talk to reporters. In January, HNA’s human resources department told employees they would be required to take a test on how to deal with the media, according to an internal document reviewed by The Times.
Meanwhile, emails continued to flood employee inboxes.
“Your year-end bonus is here,” said one dispatched Jan. 15 for an investment related to HNA’s Qianhai Air and Shipping Exchange arm. In one corner of the email was an animated image of a smiling barrel overflowing with gold coins.
The next day, another backed by Qianhai Air and Shipping was sent. He cited the rising cost of schooling and property in major Chinese cities, then compared it to the $16 minimum investment for the product, called Ladle Full of Gold.
“The cost of living is high? It said. “Ladle full of gold won’t yield!”