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2020-11-18 11:04:26

Leading Chinese rental housing agency Danke Apartment says it hasn’t gone bankrupt, attempting to quell rumors of its impending insolvency.

“We are not bankrupt, and we will not run away,” Danke said in a brief statement Monday. “Please don’t believe the rumors.”

The statement came after reports of Danke’s bankruptcy created chaos among its renters, hundreds of whom have been lining up outside the company’s offices across China to terminate their leases. Many took to microblogging platform Weibo to air their grievances, accusing Danke of abruptly cutting off utilities and landlords of evicting them from their homes.

Established in 2015, Danke is one of China’s biggest rental agencies, offering 500,000 apartments in the 13 cities where it operates. The company leases apartments that it directly rents from landlords and makes money through raised rents or personalized services, including housekeeping, or through a lump-sum rent payment used for investments.

But Danke has been struggling financially in recent months, with both its expenses and losses soaring. In the first quarter of 2020, the company reported a net loss of 1.2 billion yuan ($174 million) — compared with 816 million yuan in losses over the same period last year — while expenses also rose by 58.5%. Danke shares, however, were up 75% on the New York Stock Exchange on Tuesday, and the company’s total stock is currently valued at $400 million.

Disgruntled renters are now adding to Danke’s woes, as many are trying to get out of their leases and secure whatever recompense they can from the company. Several renters have joined private chat groups on messaging app WeChat, sharing their distress and seeking solutions, as well as demanding that the company return their deposits.

A tenant surnamed Huang in the central city of Wuhan is one of them. The 25-year-old told Sixth Tone that she had signed a one-year lease with Danke in April but is now trying to terminate the rental agreement.

“I went to Danke Apartment’s office in Wuhan to request a nonobligatory rental termination and loan cancellation, but its employees told me that the company can’t afford to refund the deposit now,” said Huang, who added that she hasn’t received the benefits stipulated in her lease.

Danke had promised Huang apartment-cleaning services and free internet, along with 168 yuan monthly cash back for long-term tenants. To receive these benefits, many tenants take out bank loans to pay the annual upfront amount.

“If the bank doesn’t terminate my loan, I’ll lose about 7,000 yuan, which includes 5,600 yuan of the to-be-returned loan and a 1,456 yuan loss from both the deposit and cash back,” Huang told Sixth Tone.

WeBank, tech giant Tencent’s digital-only bank, is one of the financial institutions partnering with Danke to provide loan services to tenants. Responding to recent news reports about Danke’s tumultuous situation, the bank said tenants who are evicted will be given extended credit lines until the end of March 2021.

But it’s not just tenants who are caught in the crossfire of Danke’s apparent financial struggles. Multiple employees from the company confirmed to Sixth Tone’s sister publication The Paper that they have not yet received last month’s salary.

A Danke salesperson in Shanghai who requested anonymity due to the sensitivity of the matter told Sixth Tone that he is still waiting for his October salary.

“All they told me is I have to wait,” the employee said. “There is no clear date whatsoever.”

Danke did not respond to Sixth Tone’s request for comment.

Editor: Bibek Bhandari.

(Header image: A man stands outside the Danke Apartment headquarters in Beijing, Nov. 10, 2020. Cai Fuliang/IC)