The Chinese developer Evergrande, with astronomical debt and which has become a symbol in China of the real estate crisis, was fined 523 million francs for violations, the stock market regulator announced on Friday.
The setbacks of Evergrande, former number one in real estate in China, have fueled distrust since 2020 in a sector that has long been very lucrative but is now shunned, against a backdrop of economic slowdown and unfinished housing.
“Between 2019 and 2020, Evergrande Real Estate (the group’s real estate subsidiary, Editor’s note) inflated its turnover and profits, which led to a fraudulent issuance of bonds on the stock market,” noted the regulator.
The regulator also criticizes Evergrande for having “failed” to publish its annual results, as it is required to do, and for not having communicated about its “inability to repay” its debts.
>> Read also: Chinese real estate giant Evergrande worries the global economy
The founder also condemned
The founder of the group, Xu Jiayin, receives a penalty of 5.9 million francs, said the regulator, who banned him from the stock market for life. Also known by his Cantonese name Hui Ka Yan, the man is said to be under house arrest, according to press information from last year, the veracity of which Evergrande has never confirmed or denied.
The group had, however, admitted that its former leader was “the subject of coercive measures due to suspicion of a crime or offense in violation of the law”, without giving further details on the nature of the alleged acts.
The term “coercive measures” generally refers in China to a form of deprivation of liberty in order to guarantee the smooth running of criminal proceedings.
Significant debts
The Evergrande group, whose descent into hell regularly makes the headlines, reported at the end of June 2023 a colossal debt estimated at more than 300 billion francs.
Given its debt, it is not immediately clear how Evergrande will pay its fines.
In January, a Hong Kong court ordered the liquidation of the group which nevertheless continues its activities. However, its listing is suspended on the stock exchange.
Evergrande’s setbacks have led to a crisis of confidence in China which has overtaken groups previously deemed financially solid, such as Country Garden, one of Evergrande’s competitors.
>> On the subject, read: One of China’s largest real estate developers collapses on the stock market
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