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China Evergrande Group said on Monday (August 5) its liquidators are seeking to recover about $6 billion from seven defendants including founder Xu Jiayin, adding that they have obtained injunctions against three of the defendants.
The world’s most indebted real estate developer, with debts exceeding $300 billion, was ordered by the Hong Kong High Court to January liquidation The company had previously failed to come up with a specific restructuring plan for its $23 billion in overseas debt.
Liquidators said they had filed legal proceedings in late March against seven defendants, which also include former CEO Xia Haijun, former CFO Pan Darong, founder Xu Zhiyong’s former spouse Ding Yumei, and three entities linked to Xu and Ding.
Liquidators said they had obtained injunctions prohibiting Xu, Ding and Xia from dealing with, disposing of or devaluing their assets worldwide, up to an amount to be determined by each.
On August 2, the court lifted the order keeping the injunction and proceedings confidential.
Edward Middleton and Tiffany Wong, joint liquidators for Alvarez and Marsal, said: “The litigation is ongoing and it is uncertain whether it will be successful or how much the company will ultimately recover.”
The liquidators aim to recover a total of $6 billion in dividends and remuneration paid by Evergrande to seven defendants based on the allegedly false financial statements for each fiscal year from 2017 to 2020.
The China Securities Regulatory Commission found earlier this year that Evergrande Real Estate’s onshore flagship subsidiary, Evergrande Group, had inflated its revenue by $78 billion in the two years to 2020.
The company said on Monday that its shares will remain suspended until further notice.
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