Down and out: CEFC staff go unpaid as once-high flying company flounders
SHANGHAI: CEFC China Energy, the once high-flying conglomerate that is now conducting fire sales of its assets following an investigation into its chief, appears to be hitting rock bottom.
Staff have not been paid for two months and are being offered severance packages, sources close to the company say, as creditors scramble to collect debts amid growing regulatory scrutiny of the firm.
Interviews with six current and former employees paint a picture of tumult at the ex-Fortune 500 company, with a growing malaise among staff members after its chairman, Ye Jianming, was revealed in February to be under investigation for suspected economic crimes.
CEFC, which in September last year agreed to buy a US$ 9.1 billion stake in the Russian oil major Rosneft, morphed in a few years from a niche fuel trader into a fast-growing diversified conglomerate with assets across the globe and more than 30,000 employees.
But now, unhelmed, apparently out of political favour, and at the mercy of circling creditors, CEFC is trying to shed assets in an effort to repay its extensive debt as banks and auditors pore over its financial statements.
CEFC did not respond to requests for comment.
On April 26, staff at the Shanghai headquarters were offered a severance package of one month salary for each year worked, plus an extra month, said four people with knowledge of the matter.
All declined to be identified by name because they were not authorised to speak to the media.
The deadline for acceptance was one day later.
“The contract is effective immediately,” said one person who accepted the offer.
Staff are also seeing other benefits, such as preferential rental rates for apartments slip away, the employees said.
At the end of April, a CEFC official said CEFC may cut half of its 30,000-strong workforce.
The swift crumbling of CEFC, which was founded in the coastal province of Fujian in 2002, has led to an exodus of employees and staff cuts. For those who are left, hoping that things might turn around, a general malaise has set in, as mounds of paperwork for asset sales pile up, according to three people with knowledge of the situation.
“No one is working anymore,” said one person who accepted the severance package.
“Some people are looking for new jobs, some people are reading books,” the person said.
“Some people are even openly playing cards.”
Inside the plush, centrally located offices of CEFC in Shanghai, staff quickly realised that their roles were changing in early March. China Development Bank, CEFC’s largest creditor, together with Shanghai Lixin Accounting Firm, dispatched around 100 people to CEFC’s offices, where they stayed for a month sifting through financial documents, according to one person with direct knowledge.
“We just had to serve them,” said one person who is still at CEFC, adding that staff were told to be compliant and provide them with whatever they needed.
Some employees found themselves having to handle disgruntled creditors, fielding questions they could not answer, and facing queues of people in the office worried about their loans.
On Thursday morning, creditors organised a sit-in at the Shanghai headquarters around 9am, according to one person with direct knowledge. — Reuters