Investors have long feared that the Chinese construction giant’s cash flow problems could lead to its collapse.
(Photo: Bloomberg)
Bengaluru The chief executive and chief financial officer of China Evergrande are stepping down after an investigation into the troubled property group’s services arm. A preliminary investigation has revealed that CEO Xia Haijun and CFO Pan Darong were involved in the loan diversion, Evergrande announced on Friday.
They reportedly used 13.4 billion yuan ($1.99 billion) owned by Evergrande Property Services as loan guarantees. The managers “transferred the loans back to Evergrande Group via third parties and used them for general business activities”. However, the guarantees were confiscated by banks, which endangered the liquidity of the Evergrande subsidiary.
The group has appointed its former managing director Siu Shawn as the new chief executive officer and vice president Qian Cheng as chief financial officer, it said. Evergrande Group is also in talks with Evergrande Property Services about a repayment plan.
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