China Evergrande Says Shenzhen Stock Exchange Found Unit, Others Broke Rules

Shares in the Chinese property giant have fallen sharply since it disclosed irregularities at its property services unit

China Evergrande Group said the Shenzhen Stock Exchange had found that its property services unit and other companies had breached rules on the use and management of funds, and ordered them to rectify the problems.

The announcement by Evergrande, one of China's largest property developers, comes as it grapples with a liquidity crisis that has raised concerns about its ability to repay its debts.

The Shenzhen Stock Exchange said in a statement on its website that it had investigated Evergrande Property Services Group Ltd and found that it had used funds raised from investors for purposes other than those stated in its prospectus.

The exchange also said that Evergrande Property Services had failed to disclose related-party transactions and had provided false information in its financial statements.

The exchange ordered Evergrande Property Services to rectify the problems by submitting a report on the corrective measures it has taken within three months.

Evergrande Property Services said in a statement that it accepts the exchange's decision and will take steps to rectify the problems.

The Shenzhen Stock Exchange also said that it had investigated China Evergrande New Energy Vehicle Group Ltd, a subsidiary of Evergrande, and found that it had also breached rules on the use and management of funds.

The exchange ordered China Evergrande New Energy Vehicle Group to rectify the problems by submitting a report on the corrective measures it has taken within three months.

Shares in Evergrande have fallen sharply since it disclosed the irregularities at its property services unit.

The company's shares have lost more than 80% of their value since the start of the year.

Evergrande is one of China's largest property developers, with a presence in more than 280 cities across the country.

The company has been hit hard by China's crackdown on the property sector, which has led to a sharp decline in property sales and prices.

Evergrande has also been struggling to repay its debts, which total more than $300 billion.

The company has missed several payments on its bonds in recent months, and there are concerns that it may default on its debts.

A default by Evergrande would have a major impact on the Chinese economy and could trigger a wider financial crisis.

The Chinese government has been trying to contain the fallout from Evergrande's problems, but it is unclear whether it will be able to prevent a default.

The government has ordered banks to increase lending to property developers, and it has also announced a series of measures to support the property market.

However, it is unclear whether these measures will be enough to prevent a default by Evergrande.

If Evergrande defaults, it could have a major impact on the global economy.

The company is one of the largest issuers of US dollar bonds in the world, and a default could trigger a sell-off in other emerging market assets.

A default by Evergrande could also lead to a loss of confidence in the Chinese government's ability to manage its economy.

Conclusion

China Evergrande's troubles are a major concern for the Chinese economy and the global financial system.

The Chinese government is trying to contain the fallout from Evergrande's problems, but it is unclear whether it will be able to prevent a default.

A default by Evergrande could have a major impact on the Chinese economy and could trigger a wider financial crisis.