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China Evergrande CEO, CFO Resign Amid Investigation

The beleaguered developer’s two most senior executives submit their resignations after audit reveals involvement in improperly diverting funds


China Evergrande Group is checking to see if offshore creditors will back its plan to fight a lawsuit in Hong Kong aimed at liquidating the group, a source says.
Evergrande said it is in talks with Evergrande Property Services about repaying the diverted funds, probably through transferring assets. File photo: Reuters

 

The beleaguered China Evergrande Group announced its chief executive and chief financial officer will step down after initial findings of an investigation uncovered they were involved in diverting loans secured by its publicly listed unit.

The indebted company was investigating the fate of some 13.4 billion yuan ($1.99 billion) belonging to Evergrande Property Services.

It found the funds “were transferred and diverted back to the group via third parties and were used for the general operations of the group.”

The embattled developer said CEO Xia Haijun and CFO Pan Darong resigned from the group due to their involvement.

 

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Siu Shawn, who is currently an executive director of the company and chairman of the group’s electric vehicle unit, has been appointed CEO, while vice-president Qian Cheng has been named CFO, the company said.

China Evergrande said it is in talks with Evergrande Property Services about repaying the diverted funds, probably through transferring assets.

The developer said it would consider appointing an internal controls consultant to conduct a comprehensive review of the company’s risk management systems in view of the initial findings.

 

  • Reuters, with editing by Neal McGrath

 

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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.