Advertisement
China Evergrande directors ‘fell short of expected standards’, says inquiry into deposits pledged as loan guarantees
- An internal commitee barred three senior executives previously forced from their jobs from returning
- It found ‘no apparent queries or challenges were raised’ when questionable transactions were made
3-MIN READ3-MIN
Elise Makin Beijing
The behaviour of certain directors at China Evergrande Group “fell below the expected standards”, according to a committee looking into 13.4 billion yuan (US$1.9 billion) of deposits used as guarantees for bank loans, that were later seized by creditors.
The committee barred three senior executives who were forced out last year – including the CEO and chief financial officer – from ever returning to their posts.
The internal investigation found “no apparent queries or challenges were raised” when questionable transactions were made, according to a filing to the Hong Kong stock exchange on Wednesday evening.
Advertisement
It criticised the stricken developer’s governance and said its employees should have “no fear of retribution” when raising questions about compliance.
The committee was set up by Evergrande’s board to investigate the pledges. Its preliminary inquiry last summer found that about 13.4 billion yuan in deposits from the 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.
The loan guarantees were made between December 2020 and August 2021 as the world’s most indebted developer faced a cash crunch.
Advertisement
Select Voice
Select Speed
1.00x