A Chinese property firm Evergrande, and its founder, Hui Ka Yan, are under fire for allegedly inflating revenues by $78 billion over two years before defaulting on debt.
The company and its founder have come under increasing scrutiny from the Chinese regulators for alleged mismanagement and financial crimes.
Financial Regulator Fines Firm
China’s financial regulator China Securities Regulatory Commission fined its subsidiary, Hengda Real Estate, $583.5 million and is considering a lifetime ban for Mr. Hui from financial markets.
Evergrande, once led by China’s richest man, faces blame for instructing staff to inflate results in 2019 and 2020 due to which Mr. Hui was fined $6.5 million.
Police Surveillance
Last September, Mr. Hui was under police surveillance for suspected illegal activities.
This crackdown follows the CSRC’s pledge to combat securities fraud. Evergrande’s $300 billion debt could lead to seizing and selling off assets, to repay the outstanding debt.
China’s property market problems affect its economy, with property investment falling 9% and new construction dropping 30% in January and February.
