China’s top bourses chastise Evergrande unit Hengda, set to punish senior executives for failing to publish accounts
- Hengda Real Estate failed to published its 2021 annual report to investors by the April 30 deadline last year
- Developer to accept disciplinary action and pledges to rush financial audit to fulfil listing obligations
The company said it will accept disciplinary action imposed on the firm, as well as action against its chairman and general manager Zhao Changlong and chief financial officer Qian Cheng. The punishment will be recorded and disclosed to the public, Hengda said, adding that it would complete its financial audit as soon as possible.
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Chinese real estate giants Evergrande and Kaisa continue unloading assets to cover debt
Hengda is an indirect wholly-owned unit of China Evergrande. While the firm is a private company, three of its bonds are listed on both onshore stock exchanges. It last published its annual report for the year 2020 in April 2021, according to exchange data.
The regulatory lapse underscores the existential crisis at its Shenzhen-based parent China Evergrande Group, which has been forced to sell assets and dial back extravagant projects to repair its balance sheet. With almost 2 trillion yuan (US$290.4 billion) of liabilities, the group has defaulted on some US$20 billion of offshore debt and failed to submit its accounts to the Hong Kong stock exchange since late 2021.
Chinese companies defaulted on US$54 billion of offshore debt in 2022, or a record 6.2 per cent of outstanding volume, versus US$10 billion in 2020 and US$4 billion in 2015, according to S&P Global Ratings. The default rate among property developers tripled to 25 per cent or US$52 billion, it added.