What’s next for Hui Ka-yan after China slaps Evergrande with a US$583 million fine and bans him from the markets for life?
- Hui Ka-yan, the founder and former chairman of the Guangzhou-based company, was fined 47 million yuan and banned from China’s capital market for life
- Six other current and former Evergrande executives have been slapped with penalties of between 200,000 yuan and 15 million yuan
China’s securities regulator fined China Evergrande Group and barred its founder from the capital markets for life, sending a warning shot against financial crimes after a blow up forced the government to intervene and extend lifelines to other developers and protect homebuyers.
The China Securities Regulatory Commission (CSRC) penalised the insolvent developer 4.2 billion yuan (US$583.4 million), saying the group inflated its sales by 564 billion yuan in the years preceding its eventual collapse. It also fined Hui Ka-yan, the group founder and former chairman, 47 million yuan and barred him from accessing the capital markets for life, it added.
Six other current and former executives of the Guangzhou-based home builder were slapped with penalties of between 200,000 yuan and 15 million yuan, the CSRC said.
The punishment added fresh signals from Beijing barely days after it warned against financial shenanigans and other excesses. China’s housing market slump since 2020 has saddled homebuyers with unfinished projects and inflicted losses on retail stock investors.
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“The depth of the alleged fraud is shocking, but should not significantly impact the company or its creditors,” said Brock Silvers, managing director at Kaiyuan Capital in Hong Kong. “The recent liquidation order probably encouraged authorities to address Evergrande’s situation before liquidators do so.”
