China Evergrande’s troubles mount as chairman is suspected of ‘illegal crimes’
The beleaguered Chinese property firm revealed that its director and executive chairman are under scrutiny over suspected crimes a day after China Evergrande’s shares were suspended in Hong Kong. Hui Ka Yan has “faced mandatory measures.” in accordance with the law due to suspicion of illegal crimes. Bloomberg said that Hui was taken away by Chinese police earlier this month and is being monitored at a designated location, citing people familiar with the matter.
Evergrande recently failed to pay the principal and interest for a 4 billion yuan ($547 million) bond that was due Sept. 25. As they released a separate filing regarding the status of its subsidiary Hengda Real Estate Group. Evergrande said that as of end-August, Hengda had a total of 1,946 pending litigation cases which involved more than 30 million yuan each, with the total amount involved of approximately 449.298 billion yuan ($61.61 billion).
Hengda’s total outstanding obligations totaled around 278.53 billion yuan, with delayed commercial bills totaling approximately 206.777 billion yuan. Evergrande stated in the same filing that there were 163 new enforcement cases against Hengda Real Estate in August, totaling approximately 9.13 billion yuan, though it did not comment on the nature of the charges. Hengda also had 68 additional cases in which its stock stake in subsidiaries and investee companies was frozen as a result of enforcement procedures.
Evergrande was once China’s largest private-sector developer in terms of sales. The world’s most indebted real estate corporation declared bankruptcy in 2021, and its stock was suspended in March of last year. After a 17-month hiatus, they only recently started trading in late August. Evergrande recently announced that it will be unable to issue additional notes under its debt restructuring plan due to an inquiry into Hengda. It also postponed a debt restructuring meeting with creditors scheduled for Monday, citing “the Group’s sales have not been as expected by the company” since its March debt restructuring announcement.
Thus, Evergrande “considers it necessary to re-assess the terms of the proposed restructuring to meet the company’s objective situation and the demand of the creditors.” Evergrande, together with associate Tianji Holdings and its subsidiary Scenery Journey, filed for Chapter 15 bankruptcy protection in a U.S. court in August.
- Published By Team Nation Press News
