Evergrande CEO, CFO step down
China Evergrande Group said on Friday that its chief executive officer and finance head have resigned after a preliminary probe found their involvement in diverting loans secured by its publicly listed unit to the group. The indebted company was investigating how deposits worth 13.4 billion yuan ($1.99 billion) belonging to the unit, Evergrande Property Services, were used as collateral for pledge guarantees and seized by banks. The pledges threatened to wipe out most of the cash the unit was holding. The company said the loans secured by the pledges, which involved three sets of deposits, “were transferred and diverted back to the group via third parties and were used for the general operations of the group.” Global investors have turned their attention to the Chinese developer’s cash flow problems out of worry that a collapse may shake the financial system and slow development in the world’s second-largest economy.
Published in The Express Tribune, July 24th, 2022.
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