Six Chinese developers face indefinite trading suspension after expressing inability to meet March 31 reporting deadline
- While Evergrande has already been suspended, China Aoyuan, Kaisa, Fantasia Holdings, Modern Land and Sunac will see their shares suspended from Friday
- Failure to produce timely audited results is a sign of potential corporate governance and financial transparency issues, Fitch says
With the March 31 reporting deadline looming, 14 Chinese developers are yet to release their audited earnings for last year, blaming it on the pandemic and their debt woes.
Six of them will see their shares suspended from Friday, April 1, until further notice because of their inability to even report unaudited results. This includes heavily indebted China Evergrande Group, which on March 21 suspended trading of its shares. China Aoyuan Group, Kaisa Group Holdings, Fantasia Holdings Group, Modern Land (China) and Sunac China Holdings are the others.
Agile Group Holding, Shimao Group, Guangzhou R&F Properties, Ronshine China Holdings, Mingfa Group International, Sansheng Holdings and JY Grandmark said they would issue unaudited results on Thursday, giving them a reprieve and allow their shares to continue trading. Powerlong Real Estate Holdings said it would release audited results later on Wednesday.
“We believe a failure to produce timely audited results is, in general, a signal of potential corporate governance and financial transparency issues, particularly when associated with a resignation or change of auditor close to reporting deadlines,” a Fitch report said.
While most developers blamed the Covid-19 pandemic as a reason for missing the reporting deadline, analysts pointed out some of the more heavily indebted ones have not even issued unaudited results to avoid share suspensions.