Chinese Property Giant Evergrande and Founder Hui Ka Yan Face Accused of $78 Billion Fraud

Struggling Chinese property giant Evergrande and its founder, Hui Ka Yan, have been thrust into the spotlight once again, accused of a staggering $78bn fraud in the years leading up to the firm’s default on its massive debts. In a dramatic turn, China’s financial markets regulator has imposed a hefty $583.5m fine on its mainland business, Hengda Real Estate, and proposed a lifetime ban for Mr. Hui from the nation’s financial markets. This development emerges amidst broader efforts by the China Securities Regulatory Commission (CSRC) to clamp down on securities fraud and protect investors.

Unraveling the Allegations

At the heart of the controversy, the CSRC accuses Hui Ka Yan of directing staff to “falsely inflate” Hengda’s annual results for 2019 and 2020, a period critical to understanding the depth of Evergrande’s financial turmoil. The inflated revenue figures reportedly accounted for half of Hengda’s total revenue in 2019 and a staggering 79% in 2020, with profits exaggerated by 63% and 87%, respectively. These revelations have not only raised serious concerns about corporate governance within Evergrande but also about the reliability of financial reporting in China’s real estate sector at large.

Source: bnn