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 the group's flagship unit of inflating results, securities fraud and failing to make timely disclosures.
Evergrande's oshore division Hengda Real Estate Group inflated its financial income by around Rmb214 billion ($29.7 billion) in 2019, and in its 2020 annual results, by a further Rmb350 billion. The CSRC placed much of the blame on the management of Hui Ka Yan.
In another punishment from the CSRC, Hengda is set to be fined Rmb4.2 billion for the false accounts.
China Evergrande confirmed the judgment 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 and what it could mean for China's property developers, click here.
