Evergrande has been accused by the UK of inflating their revenues fraudulently by £62bn.
Hui Ka Yan is the founder of the property giant Evergrande. According to the China Securities Regulatory Commission, Hui Ka Yan “instructed” other employees to “falsely inflate the company’s account in 2019 and 2020.”
Recognizing sales in advance led to an overestimation of revenues by 560bn Yuan (£62bn).
Mr Hui received a 47m Yuan (£5.1m), fine, and will be banned from ever participating in China’s stock exchanges. Evergrande has been fined 4.175bn Yuan (£456m).
Evergrande struggled for years to pay its creditors and was the symbol of China’s massive property crisis when it defaulted in 2021. A Hong Kong court issued a winding up order against the company earlier this year.
Evergrande’s fines were issued as China’s property crisis intensified last month. House sales plummeted and builders cut back on new construction.
New figures for February revealed that the number of properties sold in the real estate industry fell by over a fifth compared to last year.
The real estate industry continues to struggle with the unimpressive recovery of Covid.
In China, the amount of floorspace currently under construction was also down 29,7pc on an annual basis.
Lynn Song, economist at ING said that confidence in the sector remains low. He warned that the market for property will continue to shrink through 2024.
He said that the sentiment index had not yet reached its lowest point, having fallen from 93.34 in 2023 to just 92.13 this February. This is a new record low.
We expect that property will continue to be a major drag this year, as there has been little change in the sentiment.
Beijing has been working to achieve its 5pc target by stimulating the housing market, the economy and the housing sector.
The industrial production grew by 7pc on an annual basis, and investment in manufacturing as well as infrastructure increased.
Duncan Wrigley, Pantheon Macroeconomics, said that policymakers will continue to push cash into these industries.
He said: “Fiscal stimuli should continue to support investment in infrastructure, while financial regulators keep on directing banks to continue lending to manufacturing projects.”
Zichun Hua at Capital Economics believes that the property market will continue to slump despite government efforts to boost the economy.
She stated: “We anticipate that the economic momentum will improve further in near-term given the tailwind of policy stimulus. This recovery could be short-lived because of the economy’s structural problems.
The correction in the property construction sector is still at its infancy, despite the continued decline in home sales. We expect that it will halve over the next few years, dragging down the economic growth on a medium-term basis.