China Evergrande CEO, CFO step down following probe into property services unit

China Evergrande Group said on Friday that its chief executive officer and finance head have stepped down after initial findings of a probe into Evergrande Property Services found loans secured by the unit were redirected back to the group.

The indebted company’s property-services unit was investigating how 13.4 billion yuan ($1.99 billion) of its deposits were used as collateral for pledge guarantees and seized by banks.

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.”

The embattled developer said Chief Executive Officer Xia Haijun has resigned from the group due to his involvement in the arrangement of the pledges, along with Chief Financial Officer Pan Darong.

Siu Shawn, who is currently an executive director of the company and chairman of the group’s EV unit, has been appointed as the chief executive officer. Vice President Qian Cheng has been named the chief financial officer, the company said.

Evergrande said it was in talks with Evergrande Property Services about the repayment schedule for the amounts associated with the pledges. The plan is mainly to set off the relevant sums by transferring assets of the group to the unit, the company said.

Reuters

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