Chinese regulators will ban the president of the real estate giant from the stock market for life Evergrandea subsidiary of the company announced on Monday, adding that a large fine will be imposed on the company.
China Securities Regulatory Commission (CSRC) “plans to speak out in favor of banning Xu Jiayin from the stock market for life,” the company’s flagship unit, Hengda Real Estate, said in a statement to the Shenzhen stock exchange.
Evergrande, based in Foshan in the south of the country, was China’s largest real estate developer, with nearly 70,000 full-time employees as of the end of 2022.
However, the astronomical debt it accumulated made it an emblem of the real estate crisis that has been plaguing the world’s second largest economy for years.
According to the document sent to the stock exchange, Evergrande “received prior notification from the CSRC regarding administrative sanctions and market access bans for (…) illegal and illicit behavior.”
The company itself is “will order corrections and receive a warning in addition to a fine of 4.175 million yuan (US$580 million).”
The ruling will conclude that Xu “made decisions and organized the implementation of financial fraud, using particularly scandalous methods and in particularly serious circumstances”, According to the document. Also “will receive a warning and a fine of 47 million yuan.”
In January, a Hong Kong court ordered Evergrande into liquidation, although the company said its operations in mainland China would not be affected by the decision.
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Source: Gestion
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