On January 11, 2022, the Shenzhen headquarters building of Evergrande Group in Shenzhen, Guangdong Province, China. China Evergrande Group founder Xu Jiayin will be banned from the securities market for life and fined 47 million yuan ($6.53 million) after regulators accused the group’s flagship unit of falsely reporting results, securities fraud and failing to disclose information in a timely manner. fine.
Liang Xiashun | Visual China Group | Getty Images
China Evergrande Group Founder Xu Jiayin will be banned from the securities market for life and fined 47 million yuan ($6.53 million) after regulators accused the group’s flagship unit of inflating performance, securities fraud and failing to disclose information in a timely manner.
Evergrande Real Estate said in an exchange filing that the China Securities Regulatory Commission also punished the company and several of its former senior executives following an investigation.
The penalty is the latest challenge facing Evergrande, the world’s most indebted property developer, which defaulted on its offshore debt at the end of 2021 and was ordered to be wound up by Hong Kong’s High Court in January.
A few days ago, the China Securities Regulatory Commission vowed to severely crack down on securities fraud and protect small and medium-sized investors with “teeth and horns.”
Last September, Evergrande Group said its founder was under investigation for suspected crimes.
Evergrande Real Estate said that an investigation by the China Securities Regulatory Commission found that its inflated revenue in 2019 was 213.99 billion yuan, accounting for half of its total revenue. In 2020, the inflated sales amounted to 350 billion yuan, accounting for 78.5% of total revenue. The developer issued bonds based on these misrepresentations.
Additionally, the company failed to disclose annual and interim results, litigation and outstanding debt in a timely manner.
Citing the China Securities Regulatory Commission’s decision, the company said in a statement that Mr. Xu was directly responsible at the time and that the misconduct was “extremely egregious and serious in nature.”
Other senior executives punished include the former vice chairman and former chief financial officer of Evergrande Real Estate.
Evergrande Real Estate will be fined 4.2 billion yuan and ordered to make rectifications by the regulatory agency.
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