Evergrande crisis: property developer’s CEO and financial chief forced out amid loan inquiry

Name: New Evergrande protests amid reports troubled Chinese property giant ordered to raze development
Uploaded: 2022-07-22T19:03:29.000Z
Duration: 1 min 29 s
Description: New Evergrande protests amid reports troubled Chinese property giant ordered to raze development

Shawn Siu, an executive director, will take over for CEO Xia Haijun amid push by creditors to liquidate debt-wracked company

Change at top comes as Evergrande conducts independent inquiry into US$1.9 billion in deposits pledged as loan guarantees

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A man walks in front of a housing complex by Chinese property developer Evergrande in Beijing. The company faces a mortgage boycott crisis across the mainland. Photo: AFP

Chad Brayin London

Published: 3:03am, 23 Jul 2022Updated: 9:55am, 23 Jul 2022

Embattled property developer China Evergrande Group’s CEO and financial chief have been forced out amid an internal inquiry into 13.4 billion yuan (US$1.9 billion) in deposits used as security guarantees for bank loans, which were later seized by creditors.

The management change comes as the Guangzhou-based property developer is facing a push by creditors to liquidate the company as it teeters under a US$300 million mountain of liabilities. The company has said it hopes to announce a preliminary restructuring plan for its debt by the end of this month.

Shawn Siu, an executive director of the company, will take over for CEO Xia Haijun, according to a stock exchange filing late Friday.

Evergrande’s preliminary investigation determined that about 13.4 billion yuan in deposits from its property management unit, Evergrande Property Services, had been used as guarantees for loans taken out by third parties and the loan proceeds were then diverted back to Evergrande for general operations, according to a separate filing.

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New Evergrande protests amid reports troubled Chinese property giant ordered to raze development

The loan guarantees were made between December 2020 and August 2021 as the world’s most indebted developer faced a cash crunch. Several of the loans were not repaid and the deposits seized.

Evergrande, the mainland’s second-largest developer by sales, said on Friday that Xia, Chief Financial Officer Pan Darong, and an executive of its Hengda Real Estate Group subsidiary were all asked to resign after the internal inquiry uncovered their involvement in the loan arrangement.