The head of the heavily indebted Chinese real estate company Evergrande is to be banned from trading stocks for life. As the company announced on Monday, Hui Ka Yan was also fined the equivalent of around six million euros by the Chinese stock market regulator for various financial crimes. In addition, the stock exchange supervisory authority fined the company the equivalent of 540 million euros and punished other executives.
The Chinese real estate sector, which accounts for more than 20 percent of China’s economic output, is in a serious crisis. Evergrande, one of the largest real estate companies, is in debt to the equivalent of more than 300 billion euros. In January, a Hong Kong court ordered the company to be dissolved following complaints from creditors. However, it is unclear whether this ruling will be implemented in mainland China, where Evergrande does most of its business.
Company boss Hui was placed under police supervision by the Chinese authorities last September. In the proceedings, his company was accused of artificially increasing sales in 2019 and 2020. The real estate developer is said to have then issued bonds based on this false information. In addition, the company is said to have not been informed in a timely manner about annual and half-year results, legal disputes and outstanding debts.