Evergrande And Its Founder Accused Of $78bn Fraud

Chinese property giant Evergrande and its founder, Hui Ka Yan, have been accused by Chinese regulators of inflating revenues by $78 billion (£61.6bn).

Hengda Real Estate, the group’s principal Chinese unit, was fined 4.1 billion yuan ($580 million) by the China Securities Regulatory Commission (CSRC), the company announced.

Hui Ka Yan, was also fined 47 million yuan ($6.5 million).

Formerly China’s richest man, he was also banned from the securities markets for life.

Mr Hui was put under police surveillance last September, as he was investigated over suspected “illegal crimes”.

Hengda said the CSRC accused the company of several violations, including inflating sales in its financial reports, relying on these allegedly falsified figures to sell bonds and failing to disclose relevant information as required.

It was said that Hengda fabricated 214 billion yuan ($30 billion) in sales for 2019, and 350 billion yuan ($48.6 billion) in sales for 2020.

State media sources claim that the alleged fraud, which totaled 564 billion yuan ($78 billion) over two years, is the greatest financial fraud case in mainland China’s securities markets ever.

Melissa Enoch