China’s securities regulator has accused Evergrande and its founder Hui Ka Yan of inflating its mainland Chinese revenues by almost $80 billion over 2019 and 2020, in the first detailed allegations by authorities to shed light on the failure of the world’s most indebted property developer, reports the Financial Times. The China Securities Regulatory Commission plans to impose a RMB 4.2 billion ($580 million) fine on Hengda Real Estate, Evergrande’s mainland business, according to a filing by the company to the Shenzhen and Shanghai stock exchanges that included accusations of false documentation in financial reports.
The filing cited a CSRC preliminary decision as saying Hui, once China’s richest man, would be fined RMB 47 million and faced being banned for life from the country’s markets. It accused him of “instructing other personnel” to inflate company metrics.
The filings, released late on Monday, are a milestone moment in a prolonged corporate failure that has so far been characterised by a lack of transparency for the international investors who ploughed more than $20 billion into a business made up of hundreds of individual residential projects.