South China Morning Post
Advertisement
Advertisement
China property
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
China Evergrande is the world’s most indebted developer with liabilities of nearly US$88 billion. Photo: Reuters
BusinessCompanies

Chinese regulators summon Evergrande executives, urge them to keep operations stable, diffuse debt risks

  • China Evergrande officials were summoned for a meeting by the People’s Bank of China and China Banking and Insurance Regulatory Commission
  • Regulators urge Evergrande to follow rules and disclose information in a timely manner to prevent rumours from spreading
China property
Pearl Liu
Pearl Liu
Why you can trust SCMP

China Evergrande Group has become the latest Chinese company to be given a talking-to by the country’s top financial regulators.

The People’s Bank of China (PBOC) and China Banking and Insurance Regulatory Commission (CBIRC) said on Thursday that they had summoned China Evergrande executives for a meeting, urging the world’s most indebted developer to keep operations stable and actively diffuse debt risks.

“As a leading real estate company, Evergrande must earnestly implement the stable and healthy development strategy of the property market set out by the central government … and maintain the stability of the property and financial markets,” PBOC and CBIRC said in a joint statement.

Evergrande did not immediately respond to a request for comment.

The People’s Bank of China and China Banking and Insurance Regulatory Commission asked Evergrande executives to put their house in order. Photo: Bloomberg
China’s top financial regulators have in recent months summoned some of the country’s biggest companies, asking them “to do the right thing”, as they seek to fend off systemic risks and ensure that private enterprises do not upset the balance of the existing, centrally planned economy.

In April, top tech firms that run online financial businesses, including Tencent Holdings, Tik Tok-owner ByteDance and Didi Finance were summoned by the PBOC and three other financial regulators to “step up anti-monopoly measures” and highlighted that “financial businesses should serve the real economy as well as reduce financial risks.”

The PBOC and CBIRC also told Evergrande to follow rules and disclose information of major events in a timely manner to prevent rumours from spreading in the market.

The regulators’ concerns come close on the heels of the executive reshuffling at Hengda Real Estate Group, Evergrande’s closely-held mainland China property unit.

Hui Ka-yan steps down as chairman of Hengda as China Evergrande reshuffles its executive ranks
Earlier this week, billionaire Hui Ka-yan, who controls the Hong Kong-listed China Evergrande, stepped down as chairman of Hengda and promoted Hengda director Zhao Changlong to the position, according to information provided by the National Enterprise Credit Information Publicity System, a state-owned credit data portal.

The listed company did not make any public announcement regarding the personnel change, resulting in rumours of Hui’s exit from the group spreading online and causing its shares to fall.

However, an Evergrande spokesperson responding to media inquiries said that it was “a normal personnel change” and it did not have any impact on the management structure or a change in shareholdings.

The developer is facing a hostile market as the company attempts to steady the ship amid concerns about its finances. Unable to borrow, the group has been selling assets to avert a liquidity crunch.

Despite slashing its interest-bearing liabilities by one-third to 570 billion yuan (US$87.9 billion) in June from last year’s peak, global credit-rating firms have downgraded its creditworthiness amid concerns about its debt repayment capacity.

Post