Evergrande Group founder Xu Jiayin has faced multiple penalties since his arrest, with Evergrande Real Estate being fined several times as well. Recently, Evergrande Real Estate Group Co., Ltd. added 25 new executed person information, with a total amount of 33 billion yuan. These cases involve disputes related to bill collection rights and loan contracts. Evergrande Real Estate Group has accumulated forced executions totaling 76.9 billion yuan. The China Securities Regulatory Commission has characterized the punishment of Evergrande Real Estate as administrative, not involving criminal prosecution, leading to public scrutiny.
According to legal litigation information from Tianyancha, on June 4, Evergrande Real Estate Group Co., Ltd. added 25 pieces of executed person information, with a total amount of over 33 billion yuan, involving disputes such as bill collection rights and loan contract disputes. Some of the executed persons in these cases include Urumqi Hengchang Health Industry Development Co., Ltd., Shenzhen Evergrande Material Equipment Co., Ltd., Changchun Xinji Real Estate Development Co., Ltd., among others.
Tianyancha’s risk information shows that Evergrande Real Estate Group Co., Ltd. currently has over 830 pieces of executed person information, with a total execution amount exceeding 76.9 billion yuan. Additionally, the company also has multiple restrictions on consumption orders, dishonest executed persons (deadbeats), and final case information.
The news of “Evergrande Real Estate forcibly executed 33 billion” has once again become a hot topic, attracting widespread attention.
Some netizens expressed concern that this has made investors and creditors of Evergrande Real Estate worried, casting a chill over the entire real estate market. As a former real estate giant, Evergrande Real Estate relied excessively on high leverage and large-scale financing during its expansion, leading to a tightening of its financial chain and ultimately falling into difficulties.
On May 31, the China Securities Regulatory Commission issued a document announcing penalties for Evergrande Real Estate’s bond issuance fraud and illegal information disclosure.
Evergrande Real Estate was ordered to rectify its actions, given a warning, and fined 4.175 billion yuan. Xu Jiayin, the former chairman and actual controller of Evergrande Real Estate, was fined the maximum penalty of 47 million yuan and faced a lifetime ban from the securities market.
As per the Administrative Penalty Decision issued by the China Securities Regulatory Commission on May 21, Evergrande Real Estate was found to have committed three illegal acts:
1. False disclosures in the 2019 and 2020 annual reports of Evergrande Real Estate.
Through prematurely recognizing revenue, Evergrande Real Estate engaged in financial fraud, falsely inflating revenue by 213.989 billion yuan in 2019, accounting for 50.14% of the operating income for that period, with corresponding inflated costs of 173.267 billion yuan and inflated profits of 40.722 billion yuan, comprising 63.31% of the total profit for that period; in 2020, revenue was falsely inflated by 350.157 billion yuan, accounting for 78.54% of the operating income, with corresponding inflated costs of 298.868 billion yuan and inflated profits of 51.289 billion yuan, accounting for 86.88% of the total profit for that period.
2. Fraudulent bond issuance in Evergrande Real Estate’s public offering of corporate bonds.
Evergrande Real Estate issued the 20 Evergrande 02 bonds on May 26, 2020, with a scale of 4 billion yuan; the 20 Evergrande 03 bonds on June 5, 2020, with a scale of 2.5 billion yuan; the 20 Evergrande 04 bonds on September 23, 2020, with a scale of 4 billion yuan; the 20 Evergrande 05 bonds on October 19, 2020, with a scale of 2.1 billion yuan; and the 21 Evergrande 01 bonds on April 27, 2021, with a scale of 8.2 billion yuan.
Throughout the issuance process of the aforementioned bonds, Evergrande Real Estate cited data from the falsified 2019 and 2020 annual reports in its issuance documents, constituting fraudulent issuance.
3. Failure to disclose relevant information as required by regulations by Evergrande Real Estate. This includes the failure to disclose the 2021 annual report, the 2022 interim report, and the 2022 annual report as required; significant litigation and arbitration matters; and failure to repay maturing debts.
The above news has sparked public scrutiny, with self-media personality “Hong Discusses Business and Tao” stating that according to the Administrative Penalty Decision of the China Securities Regulatory Commission, only Evergrande Real Estate was penalized officially, not the entire Evergrande Group (which also operates in the automotive sector), and the penalties were purely administrative without criminal implications.
He noted that Xu Jiayin left behind 1.62 million incomplete properties, leaving millions homeless. In comparison, the fines imposed on him are a drop in the bucket. Currently, the public is most concerned with how his criminal responsibility will be pursued. The decisions made by the Securities Regulatory Commission have not satisfied the public or the victims.
In this shocking fraud case that has rocked the market, another well-known accounting firm has been dragged into the “scandal”—PricewaterhouseCoopers (PwC).
It is known that PwC was formed by the merger of accounting firms Price Waterhouse and Coopers Lybrand on July 1, 1998. With over 860 branch offices and locations in 152 countries, their main services include strategic transformations, process optimization, and technological solutions, making it one of the fastest-growing consulting firms.
Since Evergrande’s listing in China in 2009, PwC has been the auditing firm for Evergrande for 14 years until their partnership was terminated in January 2023. During this period, PwC had issued unqualified audit reports for Evergrande in China.
Due to being embroiled in the Evergrande falsification scandal, several parties associated with PwC have recently terminated their partnerships.