China Evergrande CEO, CFO quit amid probe

Struggling Chinese real estate developer China Evergrande has announced that its chief executive and chief financial officer have resigned after initial findings in a probe found $US2 billion ($A2.9 billion) belonging to its property unit subsidiary was redirected back to the group.

The news, announced on Friday, comes as the company is already saddled with $US310 billion in debt.

China Evergrande said CEO Xia Haijun and CFO Pan Darong had resigned over their involvement in an arrangement to use the money as collateral to guarantee a series of loans.

The money was then redirected to Evergrande through a third party, the company said.

The loans involved three sets of deposits.

The company did not name the third party.

The company is discussing with the subsidiary Evergrande Property Services regarding the repayment plan of the sums related to the pledges.

The plan is mainly to set off the relevant sums by transferring assets of the group to Evergrande Property Services.

In light of the preliminary findings, China Evergrande said it will consider appointing an internal control consultant to conduct a comprehensive review of the internal control and risk management systems of the company.

Evergrande, the world's most indebted developer, came under pressure after China's ruling Communist Party ordered property developers to cut their debt levels.

The authorities are trying to direct the industry toward a more sustainable pace of development after many years of stimulus-fuelled growth.

Austrlaian Associated PressBack to Breaking News

  • Print this page
  • Copy Link