Evergrande: Crisis-hit property giant faces deadline after bosses quit

Image source, Getty Images

Following the exit of two bosses, Evergrande is expected to deliver a restructuring plan this week.

An internal probe found that the chief executive and finance head used $2 billion in loans.

Evergrande has more than $300 billion in debts and has not paid them in a long time.

China's property sector is feared to be in danger due to the crisis.

Evergrande said on Friday that it found that chief executive Xia Haijun and chief financial officer Pan Darong were involved in taking loans from the property services unit to the wider group.

In a filing to the Hong Kong Stock Exchange, the firm said that Mr Xia and Mr Pan had resigned because of their involvement in the pledges.

The funds were diverted to third parties and used for the general operations of the group.

Evergrande is in talks with its property services unit.

The deal to sell a majority stake in the unit to another developer fell through in October.

Evergrande missed a crucial repayment deadline on its offshore debt in December and had been struggling to make payments on its over $300 billion of liabilities.

Its shares have been suspended from trading in Hong Kong for months because they have fallen so much.

A plan to restructure its debts is expected to be announced next week.

The value of the sector in China is estimated to have fallen by more than a trillion dollars.

Analysts are suggesting that Beijing may step in if Evergrande collapses.

Since the Evergrande crisis, an increasing number of developers have failed to repay their debt and continue their construction works, according to a report by Japanese banking giant.

Redd reported on Monday that China planned to set up a real estate fund to support a number of property developers.

According to the report, the fund could be worth as much as 300 billion Chinese Renminbi.

Official data shows that home sales in China have fallen in a row. In the late 1990s, China created a private property market.

Several Chinese developers have stopped the construction of homes because of concerns over cash flow.

Home buyers have been threatening to stop paying their mortgage until work restarts.

According to the E-house China Research and Development Institute, more than 200 projects have been affected.

State media reported that the China Banking and Insurance Regulatory Commission would help local governments guarantee the delivery of homes.

You could also be interested in that.