China’s deeply indebted property giant Evergrande has been fined $576 million for fraudulent business practices, Beijing’s financial regulatory body said on May 31.
“Between 2019 and 2020, Evergrande Real Estate falsely increased its revenue and profit by prematurely recognising revenue, resulting in the fraudulent issuance of bonds publicly offered on the exchange market,” the China Securities Regulatory Commission (CSRC) said in a statement issued on May 31.
Also Read: China property crisis: Chinese mega cities loosen homebuying rules as aid spreads
It added that the firm had “failed to disclose regular reports as scheduled, failed to disclose major litigation and arbitration as required and failed to disclose failure to settle debts due as required.”
The CSRC said it had also imposed a maximum fine of $6.5 million on Evergrande founder Xu Jiayin, also known as Hui Ka Yan, banning him from the securities market for life.
Also Read: China unveils ‘historic’ steps to stabilise crisis-hit real estate sector
Evergrande was once China’s biggest real estate firm, a powerhouse in a sector that helped propel the country’s rapid economic growth during recent decades.
But its spiraling debt become emblematic of a prolonged crisis in China’s real estate sector.
Struggling to repay creditors for years, it defaulted in 2021.
Also Read: Can Indian real estate market face a crisis like China’s Evergrande?
