Authorities targeted Hui Ka Yan last September. The chairman of the heavily indebted company now has to answer for, among other things, accounting falsification.
The head of the heavily indebted Chinese real estate company Evergrande is to be banned from trading stocks for life.
As the company announced on Monday, Hui Ka Yan was also fined 47 million yuan (around six million euros) by the Chinese Securities and Exchange Commission for various financial crimes. The Securities and Exchange Commission also fined the company 4.2 billion yuan and punished other executives.
Evergrande was accused, among other things, of artificially increasing its sales by more than 560 billion yuan in 2019 and 2020, it said. The real estate developer is said to have issued bonds based on these false statements. In addition, the company did not provide timely information about annual and half-year results, legal disputes and outstanding debts. Hui was placed under police supervision last September. It was unclear whether further penalties would follow.
Crisis in the industry
The Chinese real estate sector is in a serious crisis. Evergrande is a giant in the industry and is equivalent to more than 300 billion euros in debt. In January, a Hong Kong court ordered the company to be dissolved following complaints from creditors. However, it is unclear whether the ruling will be implemented in mainland China, where Evergrande does most of its business.
The crisis in the industry, which contributes around a fifth of the country’s annual economic output, is weighing heavily on the world’s second largest economy.
Source: Stern
