An independent investigation into property giant China Evergrande Group found that weak internal controls and mismanagement were behind the convoluted financing arrangements that led to $2 billion being seized by banks, reports Nikkei Asia. The company, which is undergoing restructuring, announced the results of the probe on Wednesday.
Last year, banks seized around RMB 13.4 billion in deposits, or about $2 billion, from Evergrande Property Services, a separate Hong Kong-listed real estate management company under the group’s umbrella. Following the seizure, the group set up an independent investigation into an inappropriate flow of funds to China Evergrande.
The probe concluded that a problematic funding arrangement was orchestrated by top executives at the time, though founder and Chairman Hui Ka Yan’s role was not pursued. China Evergrande already has dismissed the executives involved.