China property giant and its founder accused of $78bn fraud

China property giant and its founder accused of $78bn fraud

Evergrande, the struggling Chinese property giant, along with its founder Hui Ka Yan, faces allegations of inflating revenues by $78 billion (£61.6 billion) in the two years preceding the company’s default on its debt.

The mainland business of Evergrande, Hengda Real Estate, has been fined $583.5 million by the country’s financial markets regulator.

Additionally, Hui potentially faces a lifetime ban from China’s financial markets.

In January, Evergrande received an order from a Hong Kong court to liquidate.

The China Securities Regulatory Commission (CSRC) attributed most of the wrongdoing to Hui, formerly China’s wealthiest individual, alleging that he directed staff to “falsely inflate” Hengda’s annual financial results for 2019 and 2020.

According to a filing by the company to the Shenzhen and Shanghai stock exchanges, Hui has also been fined $6.5 million.

Last September, Hui, who also serves as the company’s chairman, was placed under police surveillance during an investigation into suspected “illegal crimes.”

The announcement from CSRC follows closely after its pledge to intensify efforts against securities fraud and safeguard small investors with robust measures.

Evergrande has been the face of China’s real estate downturn, grappling with over $300 billion in debt.