China Evergrande Group founder, chairman and executive director Hui Ka Yan has been handed a ban from the securities market for life and fined Rmb47 million ($6.53 million) after the China Securities Regulatory Commission (CSRC) accused one of the group’s units, Hengda Real Estate Group (Hengda), of inflating results, securities fraud and failing to make timely disclosures.
Evergrande’s mainland China division Hengda inflated its revenues by around Rmb214 billion ($29.7 billion) in 2019, and by a further Rmb350 billion in its 2020 annual results, according to a statement put out by Evergrande on the Shenzhen Stock Exchange, relating to the CSRC report. The CSRC placed much of the blame on the management of Hui Ka Yan, but several other officials have also been reprimanded.
In another punishment from the CSRC, Hengda is set to be fined Rmb4.2 billion for the false accounts.
China Evergrande confirmed the judgement in an announcement to the Shenzhen Stock Exchange on March 18. On September 28, 2023 the company had recognised in a Hong Kong Stock Exchange announcement that Hui Ka Yan had been subjected to “measures” due to the suspicion of “illegal crimes”. The group’s shares were also suspended.
The news comes as Evergrande faces many challenges after a Hong Kong High Court placed the firm into liquidation at the end of January. Evergrande filed for bankruptcy in New York on August 17, 2023.
For more FinanceAsia analysis on Evergrande’s liquidation in Hong Kong, and what it could mean for China’s property developers, click here.
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