news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

on september 25, the china securities regulatory commission issued an administrative penalty decision (xia haijun), who was then the vice chairman and president of china evergrande group. the china securities regulatory commission decided to: warn xia haijun and impose a fine of 5 million yuan for evergrande real estate's illegal disclosure of false records in its 2019 and 2020 annual reports; and impose a fine of 10 million yuan on xia haijun for the fraudulent issuance of evergrande real estate's public issuance of corporate bonds. in view of the fact that xia haijun organized and arranged the preparation of false financial reports, the means were particularly bad and the circumstances were particularly serious, xia haijun was banned from the securities market for life.

the penalty decision shows that after investigation, xia haijun has committed the following illegal acts:

1. the 2019 and 2020 annual reports disclosed by evergrande real estate contained false records

evergrande real estate committed financial fraud by prematurely recognizing revenue. in 2019, it falsely inflated its revenue by rmb 213.989 billion, accounting for 50.14% of the current operating income, corresponding to falsely inflated costs of rmb 173.267 billion and falsely inflated profits of rmb 40.722 billion, accounting for 63.31% of the current total profit; in 2020, it falsely inflated its revenue by rmb 350.157 billion, accounting for 78.54% of the current operating income, corresponding to falsely inflated costs of rmb 298.868 billion and falsely inflated profits of rmb 51.289 billion, accounting for 86.88% of the current total profit.

2. evergrande real estate’s public issuance of corporate bonds was fraudulent

on may 26, 2020, evergrande real estate issued 20 evergrande 02 bonds with an issuance scale of 4 billion yuan; on june 5, 2020, it issued 20 evergrande 03 bonds with an issuance scale of 2.5 billion yuan; on september 23, 2020, it issued 20 evergrande 04 bonds with an issuance scale of 4 billion yuan; on october 19, 2020, it issued 20 evergrande 05 bonds with an issuance scale of 2.1 billion yuan; on april 27, 2021, it issued 21 evergrande 01 bonds with an issuance scale of 8.2 billion yuan.

the issuance documents announced by evergrande real estate during the issuance of the above-mentioned bonds respectively cited relevant data from the 2019 and 2020 annual reports that contained false records, resulting in fraudulent issuance.

the csrc believes that the 2019 and 2020 annual reports disclosed by evergrande real estate contain false records, which violates article 78 of the securities law, which states that "the information disclosed by the information disclosure obligor shall be true, accurate, complete, concise, clear, easy to understand, and shall not contain false records, misleading statements or major omissions", and constitutes the behavior described in the second paragraph of article 197 of the securities law. xia haijun, then vice chairman and president of china evergrande group, actually coordinated the daily business affairs of evergrande real estate and organized the preparation of false financial reports. his means were particularly bad and the circumstances were particularly serious. he was the directly responsible supervisor for the false records in the 2019 and 2020 annual reports.

the public issuance of corporate bonds by evergrande real estate was a fraudulent issuance, which violated the first paragraph of article 19 of the securities law, which states that "the securities issuance application documents submitted by the issuer shall fully disclose the information necessary for investors to make value judgments and investment decisions, and the content shall be true, accurate and complete", and constituted the behavior described in the first paragraph of article 181 of the securities law. xia haijun, then vice chairman and president of china evergrande group, actually coordinated the daily business affairs of evergrande real estate and organized the preparation of false financial reports. his means were particularly bad and the circumstances were particularly serious. he was the directly responsible supervisor.

based on the facts, nature, circumstances and degree of social harm of the parties’ illegal acts, the csrc decided:

1. in response to the illegal act of evergrande real estate disclosing false records in its 2019 and 2020 annual reports, xia haijun was given a warning and fined rmb 5 million in accordance with the provisions of article 197, paragraph 2 of the securities law;

2. in response to the fraudulent issuance of corporate bonds by evergrande real estate, xia haijun was fined rmb 10 million in accordance with article 181 of the securities law.

3. in view of the fact that xia haijun organized and arranged the preparation of false financial reports, the means were particularly bad and the circumstances were particularly serious, in accordance with article 221 of the securities law and article 3, item 1, and article 5, item 3 of the 2015 securities market prohibition provisions (csrc order no. 115), xia haijun is banned from the securities market for life. from the date of announcement of the decision, during the ban period, in addition to not being allowed to continue to engage in securities business in the original institution or serve as a director, supervisor, or senior manager of the original listed company or non-listed public company, he is also not allowed to engage in securities business in any other institution or serve as a director, supervisor, or senior manager of other listed companies or non-listed public companies.