Embattled developer Kaisa Group to resume construction at project in Foshan after receiving funds held in escrow accounts
- Kaisa has pledged to resume construction at a project in the southern city after funds held in escrow accounts were returned to it
- It follows reports that China is drafting rules to make it easier for developers to access funds from sales still held in escrow accounts
“After friendly negotiations with the government and regulatory banks, the presale payments [for the project] have been returned and will be used for resumption of work and production of the project,” Kaisa Foshan said in a statement on its official WeChat account on Monday.
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“Our company will make every effort to ensure that the project is delivered on time!”
The new rules would help developers meet their debt obligations, pay suppliers and finance operations by letting them use the funds in escrow that are currently controlled by municipal governments with no central oversight. The Reuters report cited four people with knowledge of the matter.
While Chinese developers are allowed to sell residential projects before completing them, they are required to put the proceeds in escrow accounts.