New, yet another tile for Evergrande, ended up at the center of a fraud. The company that triggered China's real estate crisis has falsified accounts and inflated revenues of approximately 78 billion dollars. This was established by the China Securities Regulatory Commission (CSRC), the Chinese stock exchange control authority, which fined the founder, Hui Ka Yan, of $6,5 million and banned him from the country's financial markets forever. According to the authorities, it was he who organized the fraud. Former CEO Xia Haijun received a fine of $2 million and was also banned from Chinese markets, while Hengda, the conglomerate's main unit, received a fine of $580 million.
The accusations
According to Chinese authorities, Hengda would increase its revenues in 2019 by approximately 214 billion yuan (+63% equal to 29,7 billion dollars) by including advance sales, and by another 350 billion yuan (+87%) in the 2020 financial statements. Subsequently, thanks to these numbers fakes, would have raised 2,9 billion dollars on the financial markets.
For the China Securities Regulatory Commission, much of the blame for what happened lies with former founder Hui Ka Yan, who in fact received the highest fine. Hui allegedly instructed other managers to “falsely inflate” annual results of Hengda for 2019 and 2020.
The Evergrande crisis
The Evergrande crisis began in 2021, when it emerged that China's second-largest real estate company had accumulated over 300 billion dollars in debtthe. News that triggered an endless collapse. Last summer the group announced important progress in its debt restructuring plan, but everything stopped in September, when Hui was placed under investigation. In January 2024, a Hong Kong judge ordered the liquidation of Evergrande.
