China Evergrande Group said on Monday that company liquidators are seeking to recover billions of dollars from founder Hui Ka Yan, his former wife and former top executives.
The group said the liquidators are seeking to recover about $6 billion from seven defendants – Hui, his former spouse Ding Yumei, two former executives and others – and they have obtained injunctions against three of them.
With more than $300 billion of liabilities, the world’s most indebted property developer was ordered by the Hong Kong High Court to liquidate in January after it failed to offer a concrete restructuring plan for its $23 billion in offshore debt.
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In a filing, the liquidators said they had started legal proceedings in late March against seven defendants, who also include former CEO Xia Haijun and former chief financial officer Pan Darong, as well as founder Hui’s former spouse Ding Yumei, and three entities associated with Hui and Ding.
The liquidators said they had obtained injunctions restraining Hui, Ding and Xia from dealing with, disposing of, or diminishing the value of their worldwide assets up to various prescribed limits.
Confidentiality orders on the injunctions and the proceedings were lifted by the court on August 2.
“The proceedings are ongoing and there is no certainty as to whether or not they will be successful and as to the amount that may ultimately be recovered by the company,” joint liquidators Edward Middleton and Tiffany Wong from Alvarez and Marsal said.
The liquidators aim to recover dividends and remuneration totalling $6 billion that Evergrande paid to the seven defendants on the basis of allegedly misstated financial statements for each of the financial years from 2017 to 2020.
The China Securities Regulatory Commission earlier this year found that Evergrande’s onshore flagship unit Hengda Real Estate had overstated revenue by 564 billion yuan ($78 billion) over two years through 2020.
The company said on Monday its shares will remain suspended until further notice.
- Reuters with additional editing by Jim Pollard
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