Quick access to main page (top) Direct access to main contents Quick access to main page (bottom)

Evergrande’s Founder Faces Lifetime Ban Amid Bankruptcy Threat

Daniel Kim Views  

clip20240319162823
Beijing Youth Daily

Evergrande, blamed for the downfall of the real estate market and effectively causing China’s economic slump, appears to be facing de facto bankruptcy after receiving various dispositions from the authorities recently. It’s safe to say there’s almost no chance of recovery.

According to reports on the 19th by Beijing Youth Daily and other media, the punitive measures imposed by China’s securities regulator, the Securities Regulatory Commission, on Evergrande officials, including founder Xu Jiayin (65), are not few. Among them is the lifetime ban imposed on founder Xu from entering the stock market, effectively rendering him financially incompetent.

The imposition of a 47 million yuan fine should also be mentioned, which, though not a large amount for him, carries significant symbolic meaning. His right-hand man, former CEO Xia Haijun, also faced sanctions, including an order to pay a fine of 15 million yuan.

Moreover, the Securities Regulatory Commission also ordered Xu not to indulge in a luxury lifestyle again. Officially, he was accused of committing accounting fraud by inflating sales figures for 2019 and 2020, but it seems more like a punishment for ruining the real estate market. The Commission’s announcement that “Xu Jiayin decided and organized financial manipulations. The means were particularly vile, and the circumstances particularly grave” indicates this sentiment.

The corporate entity has to pay a massive price for committing accounting fraud, with a fine of 41.75 billion yuan. Given its current position on the brink of default, this presents a particularly challenging situation, with seemingly no ability to pay the fine. Considering that the market capitalization of the Hong Kong stock exchange is around 2.2 billion yuan, this seems plausible.

Evergrande was founded by Xu Jiayin in 1996 in Guangzhou, Guangdong, and grew into a conglomerate through its real estate business. However, its expansion into various business sectors, aggressive acquisitions and mergers, and reckless investment in new businesses backfired, leading to a debt crisis. As of March this year, its officially confirmed debt is estimated to reach 443 trillion yuan, with the potential for more if hidden debts are included. It’s in a situation where it could declare bankruptcy multiple times.

It would be odd if Xu Jiayin were unscathed. He was detained last September and is currently being investigated by the authorities. Some speculate that he could even face the death penalty through trial. The company’s bankruptcy and losing his fortune are not his only problems. If he’s not careful, he could indeed end tragically, leaving his glamorous past behind.

Daniel Kim
content@viewusglobal.com

Comments0

300

Comments0

[ASIA] Latest Stories

  • North Korea Buried in April Snow—Experts Warn of Major Crop Damage After Climate Shock
  • North Korea’s Smartest Teens Are Being Dragged Into the Military—Here’s Why
  • North Korea Opens Its First Internet Café—and Kim Jong Un Brings His Daughter
  • Vietnam Cracks Down on Imports to Avoid U.S. Tariff Backlash
  • Hyundai Ioniq 5 N Time Spec Breaks Tsukuba Circuit Record, Cementing EV Performance Legacy
  • North Korea Sends Young Volunteers to Dangerous Jobs Under the Guise of Voluntary Participation

You May Also Like

  • 1
    Neck Wrinkles Giving You Away? Here’s How to Smooth Things Out

    LIFESTYLE 

  • 2
    Pfizer Ends Obesity Drug Trial After Liver Risk Emerges

    LATEST 

  • 3
    Real Teeth, Grown in a Lab? Scientists Say It’s Closer Than You Think

    LIFESTYLE 

  • 4
    Truth About Carbs and Kids: Why Balance Is Everything

    LIFESTYLE 

  • 5
    Scabies in the Dorms? Here’s How Fast It Can Spread

    LIFESTYLE 

Popular Now

  • 1
    Drank Last Night? Here's Why Skipping the Gym Might Be Smarter

    LIFESTYLE 

  • 2
    Think Twice Before Adding Water to Your Shampoo Bottle—Here’s Why

    LIFESTYLE 

  • 3
    Can Balancing Blood Sugar Help You Lose Weight? Here's Why it Matters

    LIFESTYLE 

  • 4
    Scientists Find Brain Switch That Could Help Reverse Memory Loss

    LIFESTYLE 

  • 5
    Hugh Jackman Did It for Wolverine. Can You Do It for Your Waistline?

    LIFESTYLE 

Must-Reads

  • 1
    Neck Wrinkles Giving You Away? Here’s How to Smooth Things Out

    LIFESTYLE 

  • 2
    Pfizer Ends Obesity Drug Trial After Liver Risk Emerges

    LATEST 

  • 3
    Real Teeth, Grown in a Lab? Scientists Say It’s Closer Than You Think

    LIFESTYLE 

  • 4
    Truth About Carbs and Kids: Why Balance Is Everything

    LIFESTYLE 

  • 5
    Scabies in the Dorms? Here’s How Fast It Can Spread

    LIFESTYLE 

Popular Now

  • 1
    Drank Last Night? Here's Why Skipping the Gym Might Be Smarter

    LIFESTYLE 

  • 2
    Think Twice Before Adding Water to Your Shampoo Bottle—Here’s Why

    LIFESTYLE 

  • 3
    Can Balancing Blood Sugar Help You Lose Weight? Here's Why it Matters

    LIFESTYLE 

  • 4
    Scientists Find Brain Switch That Could Help Reverse Memory Loss

    LIFESTYLE 

  • 5
    Hugh Jackman Did It for Wolverine. Can You Do It for Your Waistline?

    LIFESTYLE 

Share it on...