(Belga) The Chinese real estate developer Evergrande, ultra-indebted and symbol of the sector’s crisis in China, forced its CEO and its financial director to resign following an internal investigation implicating them.
These departures come at a time when the company, in dire need of cash, is fighting for its survival and is trying to conclude a restructuring agreement for its debt estimated at around 300 billion dollars. Evergrande was investigating why banks unexpectedly seized 13.4 billion yuan ($2 billion) in bank deposits from its property services unit, Evergrande Property Services. The group had launched an internal investigation, with the help of lawyers and accountants, in order to clarify the facts. According to the statement issued by Evergrande on Friday evening, the money was seized by the banks, because it was in fact used as a “mortgage guarantee” so that a “third party” might obtain a bank loan. Funds obtained from the loan were “diverted to the group through third parties and were used for general group operations” Evergrande, according to the company. “In view of the context, the board of directors has decided to demand the resignation” of the executives involved, including the CEO of China Evergrande Group, Xia Haijun, as well as the chief financial officer, Pan Darong, notes the press release, published on the website of the Hong Kong Stock Exchange, where it is listed. The group’s former chief executive, Siu Shawn, has been named CEO. (Belga)
