After an internal inquiry into the reasons why banks took more than $2 billion from the business’s property services unit, embattled Chinese real estate giant Evergrande has fired its CEO and CFO, the company has said.
The resignations come at a time when Evergrande is struggling to stay afloat and is trying to negotiate a restructuring deal with its creditors, to whom it owes an estimated $300 billion.
Following an internal inquiry into why banks abruptly took 13.4 billion yuan ($2 billion) in deposits from its real estate services subsidiary, Evergrande Property Services, the executives were compelled to resign on Friday.
According to a statement from the business late Friday night, investigators determined the money was taken because it was being used as a guarantee to enable a “third party” to secure a loan.
The money gained from that loan was then “returned to the Group via third parties and was utilized for… general activities,” it continued.
- Colombia makes its first Bitcoin real estate purchase
- The Price of Real Estate in Florida Triples
- What’s Next after Selling Your Real Estate in a Small City
The statement, which was posted on the website of the Hong Kong Stock Exchange, where the company is listed, stated that “in view of this, the Board agreed to urge” that the relevant officials, including CEO Xia Haijun and chief financial officer Pan Darong, quit.
Siu Shawn, an executive director, has been named CEO.
Evergrande, formerly a leader in the Chinese real estate industry, has recently struggled to sell off properties, with chairman Hui Ka Yan using his own money to settle some of the company’s obligations.
China’s real estate market has been negatively impacted by Evergrande’s problems, with smaller companies unable to get money and others defaulting on loans.
China’s real estate companies are in crisis due to Beijing’s efforts to rein in debt, reducing cash flows. As a result, they have long been largely dependent on loans to finance their vast constructions.
Comment Template