Sunday, 2024 June 23

Trouble grows for Danke as WeBank delays payments for evicted tenants

Tencent-backed WeBank on Wednesday started offering an interest-free payment delay for clients who took out loans to pay their rents to the financially-troubled apartment leasing company Danke (NYSE: DNK), according to a post by WeBank on the microblogging site Weibo.

This comes after a string of reports that Danke, run by Beijing-based Phoenix Tree Holdings Ltd, failed to pay landlords since earlier this year. As a result, numbers of Danke tenants, who were required to pay their rents via loans issued by WeBank, face eviction despite continuing to pay.

WeBank is promising to waive the interest of the loan and delay the payments until the end of 2023. It has 161,845 customers who live in Danke-operated apartments and the service will be available to 40,077 of them who have already registered. The firm also said that the delay won’t affect the tenants’ credit ratings. “We will follow up on the Danke issue, and figure out solutions to minimize our customers’ loss,” reads the statement from WeBank. “If the matter is still unsettled by the end of 2023, we will propose new solutions accordingly.”

“They are just slowing it down,” said an affected Danke tenant in a WeChat group that includes hundreds of people in a similar situation. “It simply means that we have to pay three years later.”

Shanghai’s House Management Bureau said on Tuesday that it has been in talks with related companies, stated-owned The Paper reported. “In the case of being evicted by the landlord, you should negotiate with the landlord by presenting the relevant contract and proof of payment,” it said. “If you cannot reach an agreement, you can seek help through legal institutions, reporting it to police departments, or seeking mediation from your community office staff to protect your legal rights.”

Chinese regulators, meanwhile, reportedly reached out to the long-term apartment leasing firms Ziroom and 5i5j (SZ:000560), as well as China Construction Bank to explore if they can take over Danke’s business. So far, it hasn’t been possible to close a deal because of the huge cash gap, financial news media outlet Caijing found out. The report estimated that Danke’s cash shortage has crossed RMB 960 million (USD 146.38 million), citing people with knowledge of this issue. Amid the crisis, competitor Ziroom already decided to partially drop the requirement to take out bank loans for the rental payment.

Wency Chen
Wency Chen
Wency Chen is a reporter KrASIA based in Beijing, covering tech innovations in&beyond the Greater China Area. Previously, she studied at Columbia Journalism School and reported on art exhibits, New York public school systems, LGBTQ+ rights, and Asian immigrants. She is also an enthusiastic reader, a diehard fan of indie rock and spicy hot pot, as well as a to-be filmmaker (Let’s see).

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