Evergrande seeks US$6 billion from Hui Ka-yan, others in dividends paid on fake accounting
- Hong Kong’s High Court on August 2 lifted its confidentiality order on the lawsuit initially filed by the company liquidators in late March
China Evergrande Group is seeking to claw back about US$6 billion worth of dividends and other benefits paid to its founder Hui Ka-yan and several top executives based on misstated financial results before its financial collapse.
The bankrupt developer, now administered by liquidators, sued in March to recover the sum from former executive chairman Hui, former CEO Xia Haijun and former CFO Pan Darong, among others, according to a stock exchange filing late Monday. The High Court in Hong Kong lifted its confidentiality order on August 2.
The liquidators have since added Ding Yumei, who is Hui’s spouse or former spouse, and three entities associated with them, as co-defendants, it added.
The developer, struggling under more than US$300 billion in total liabilities, defaulted on about US$20 billion of offshore bonds in late 2021. Chinese authorities detained Hui and later said Evergrande inflated its sales by 564 billion yuan (US$78.9 billion) from 2019 to 2020, and fabricated its profits by 92 billion yuan in the nation’s largest corporate fraud.
The High Court in January ordered Evergrande to fold after some creditors ran out of patience to recover their debts, the biggest bankruptcy case in Hong Kong stock market history. The court named Eddie Middleton and Tiffany Wong Wing-sze from consulting firm Alvarez & Marsal as liquidators.