Source: Broker China
Evergrande Xia Haijun received another penalty.
On May 13, the Shenzhen Stock Exchange published the “Advance Notice of Disciplinary Punishment” delivery notice on its official website. The announcement stated that Xia Haijun is the controlling shareholder of Evergrande Real Estate Group Co., Ltd.$EVERGRANDE (03333.HK)$During his time as a group director, he was suspected of violating the relevant provisions of sections 1.5 and 1.6 of the Shenzhen Stock Exchange's “Corporate Bond Listing Rules (2018 Revision)”.
The Shenzhen Stock Exchange plans to punish him publicly for life as unfit to act as a director, supervisor, senior management of a bond issuer, and a public censure. According to data, Xia Haijun was the former vice chairman and president of Evergrande Group.
It is worth mentioning that in March of this year, the Securities Regulatory Commission already issued administrative penalties and advance market ban notices to Xu Jiayin and Xia Haijun, warned Xia Haijun for suspected false records and fraudulent issuance of annual reports, imposed a fine of 15 million yuan, and imposed a lifelong ban on Xia Haijun from entering the securities market.
The Shenzhen Stock Exchange called on Xia Haijun to receive a fine
On May 13, the Shenzhen Stock Exchange issued an announcement showing that during her time as a director of China Evergrande Group, the controlling shareholder of Evergrande Real Estate Group Co., Ltd., Xia Haijun allegedly violated the relevant provisions of sections 1.5 and 1.6 of the “Corporate Bond Listing Rules (2018 Revision)”.
According to section 8.3 of the “Corporate Bond Listing Rules (2018 Revision)”, section 45 of the “Implementation Rules on Self-Regulatory Supervision Measures and Disciplinary Punishment (2018 Revision)”, and section 46 of the “Implementation Measures for Self-Regulatory Supervision Measures and Disciplinary Punishment (2020 Revision)”, the Shenzhen Stock Exchange plans to publicly dispose of Xia Haijun as a director, supervisor, senior manager, and public censure for life.
Since it was impossible to get in touch with Xia Haijun, the Shenzhen Stock Exchange now informs Xia Haijun of matters relating to the proposed disciplinary action in the form of an announcement. Xia Haijun was also requested to go to the Shenzhen Stock Exchange to obtain the “Advance Notice of Disciplinary Punishment” within 10 days from the date of the announcement. If the receipt is overdue, it will be deemed delivered upon expiration of the above period, and the Shenzhen Stock Exchange will make a formal disciplinary decision in accordance with the relevant regulations.
The Shenzhen Stock Exchange said that according to the provisions of the “Self-Regulatory Measures and Implementation Measures for Disciplinary Punishment”, Xia Haijun has the right to make statements and arguments. If Xia Haijun has objections to the aforementioned proposed disciplinary action, she should submit written statements and arguments to the Shenzhen Stock Exchange within the time specified in the “Advance Notice of Disciplinary Action” and provide relevant evidence. According to the provisions of the “Self-Regulatory Supervision and Hearing Procedure Rules”, Xia Haijun can also apply for a hearing. If applying for a hearing, she should submit written statements and arguments to the Shenzhen Stock Exchange within the time specified in the “Advance Notice of Disciplinary Punishment” and submit written statements and arguments. If the submission is overdue, it is deemed a waiver of the right to hear, present and defend.
As far as China's Evergrande is concerned, it is currently in liquidation and trading was suspended on January 29 this year. On April 30 this year, China Evergrande announced a delay in publishing the annual results for the year ended December 31, 2023 due to “delays in preparing the company's financial statements for the year ended December 31, 2023 and publication of the 2023 annual results due to joint and various liquidators currently investigating the company's current affairs situation.” Subsequently, separate announcements will be issued in due course on the publication dates of the 2023 Annual Results and the 2023 Annual Report in accordance with the listing rules.
The Securities Regulatory Commission has previously punished him
In fact, before the Shenzhen Stock Exchange issued an advance notice of disciplinary punishment against Xia Haijun, the Securities Regulatory Commission had already punished her.
On March 18 of this year, Evergrande Real Estate issued an announcement regarding the receipt of administrative penalties and advance notice of market bans from the China Securities Regulatory Commission. The Securities Regulatory Commission will impose administrative penalties such as fines and market bans on Evergrande Real Estate, Xu Jiayin, Xia Haijun, Pan Darong, Pan Hanling, Ke Peng, Zhen Litao, and Qian Cheng.
As determined by the Securities Regulatory Commission, Evergrande Real Estate, Xu Jiayin, Xia Haijun and others are suspected of breaking the law are mainly the following three:
First, there are false records in the 2019 and 2020 annual reports disclosed by Evergrande Real Estate. Through early revenue recognition, Evergrande Real Estate inflated revenue of 213.989 billion yuan in 2019, accounting for 50.14% of current revenue, corresponding inflated costs of 173.267 billion yuan, and inflated profit of 40.722 billion yuan, accounting for 63.31% of total current profit; in 2020, Evergrande Real Estate's inflated revenue of 35.157 billion yuan, accounting for 78.54% of current revenue, corresponding to an inflated cost of 298.868 billion yuan The profit was $51.289 billion, accounting for 86.88% of the total profit for the period.
Second, Evergrande Real Estate's public offering of corporate bonds is suspected of being fraudulently issued. According to the Securities Regulatory Commission, the four bonds issued by Evergrande Real Estate in 2020, with a total amount of 12.6 billion yuan and bonds with a total scale of 8.2 billion yuan issued on April 27, 2021, are suspected of being fraudulently issued because the issuance documents announced during the issuance process separately quoted data relating to the 2019 and 2020 annual reports with false records.
Third, Evergrande Real Estate failed to disclose relevant information in a timely manner in accordance with regulations. This includes: Evergrande Real Estate did not disclose the 2021 Annual Report, 2022 Interim Report, and 2022 Annual Report as scheduled; failure to disclose major litigation and arbitration situations in accordance with regulations; and failure to pay maturing debts in accordance with regulations.
Regarding the illegal acts involving Xia Haijun, the Securities Regulatory Commission pointed out that Xia Haijun, then vice chairman of the board of directors and president of Evergrande Group, actually co-ordinated the daily business affairs of Evergrande Real Estate and organized the preparation of false financial reports. The methods were particularly bad, and the circumstances were particularly serious. He was the directly responsible supervisor.
The Securities Regulatory Commission said that Xu Jiayin, then chairman of Evergrande Real Estate, and Xia Haijun, then vice chairman of the board of directors and president of China Evergrande, and others made decisions and organized the execution of financial fraud, etc., and the circumstances were particularly serious. Xu Jiayin and Xia Haijun were fined 47 million yuan and 15 million yuan respectively, and imposed a lifetime ban on the securities market.
editor/tolk