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on september 25, the china securities regulatory commission’s official website releasedxia haijun, former president of evergrande groupadministrative penalty decision.

the penalty decision shows that xia haijun was the vice chairman and president of china evergrande group at the time. the csrc decided to punish evergrande real estate for the illegal act of disclosing false records in its 2019 and 2020 annual reports.xia haijun was given a warning and fined 5 million yuan;

regarding the fraudulent issuance of corporate bonds by evergrande real estate,xia haijun was fined 10 million yuan.given 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.

it is worth noting that on may 31, the official website of the china securities regulatory commission issued the "china securities regulatory commission's decision to punish evergrande real estate's fraudulent issuance of bonds and illegal information disclosure."

the china securities regulatory commission made an administrative penalty decision on the fraudulent issuance of bonds and illegal information disclosure by evergrande real estate in accordance with the law. it ordered evergrande real estate to correct its mistakes, gave it a warning and imposed a fine of 4.175 billion yuan. it also imposed the maximum fine of 47 million yuan on xu jiayin, the then chairman and actual controller of evergrande real estate, and banned him from the securities market for life.

at that time, the china securities regulatory commission investigated evergrande real estate group co., ltd. and xu jiayin,six company executives including pan darong and ke peng were punished.as xia haijun could not be contacted, the csrc said it had initiated the announcement delivery procedure and would deal with him separately in accordance with the law.

xia haijun, former president of evergrande, was fined 15 million

the relevant contents of the administrative penalty decision are as follows:

party involved: xia haijun, male, then vice chairman and president of china evergrande group.

in accordance with the relevant provisions of the securities law of the people's republic of china (hereinafter referred to as the "securities law"), i have filed a case and conducted an investigation and trial into the fraudulent issuance of bonds and illegal and irregular information disclosure by evergrande real estate group co., ltd. (hereinafter referred to as evergrande real estate), and have informed the parties concerned of the facts, reasons, basis for the administrative penalties and the rights they enjoy according to law.we have legally announced and served the "preliminary notice of administrative penalty and market ban" to the party involved, xia haijun. now the announcement period has expired, and xia haijun has not received the notice within the prescribed time, nor has he made any statement of defense or requested a hearing.the investigation and trial of this case have now been completed.

it was found that the parties had 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 above-mentioned illegal facts are sufficiently confirmed by evidence such as evergrande real estate's annual report, bond prospectus, credit rating report, issuance result announcement, financial information, situation statement, and relevant party interrogation records.

i believe that the false statements in the 2019 and 2020 annual reports disclosed by evergrande real estate violate article 78 of the securities law, which stipulates that "the information disclosed by the information disclosure obligor shall be true, accurate, complete, concise, clear, and easy to understand, and shall not contain false statements, misleading statements or major omissions", and constitute 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 operations of evergrande real estate and organized the preparation of false financial reports. his methods were particularly bad and the circumstances were particularly serious., is the directly responsible supervisor for the false statements in the 2019 and 2020 annual reports.

the public issuance of corporate bonds by evergrande real estate involved 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 operations 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 party’s illegal behavior, i will decide:

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 the announcement of the decision by the commission, 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.

the annual salary was as high as 270 million yuan, known as"working emperor"

public information shows that xia haijun was born in harbin in 1964. he graduated from central south university and jinan university with a bachelor's degree in metal materials, a master's degree in business administration (mba), and a doctorate in industrial economics. he joined evergrande in 2007.

xia haijun. image source: evergrande group wechat official account

xia haijun was onceknown as the "working emperor"according to statistics, xia haijun received a total of 1.638 billion yuan from china evergrande in the 13 years from 2008 to 2020. according to the "hong kong listed chinese stock ceo salary list" released by forbes in 2017,xia haijun topped the list with 270 million yuan.

when evergrande was in a difficult crisis, xia haijun, then ceo of china evergrande, chose to sell off his holdings and cash out. on august 11, 2021, xia haijun sold off his holdings in evergrande property and evergrande auto for approximately hk$73.02 million and hk$42.53 million, respectively, totaling approximately hk$116 million.

on may 13, the shenzhen stock exchange announced that it had found that xia haijun was suspected of violating the relevant provisions of article 1.5 and article 1.6 of the shenzhen stock exchange's "corporate bond listing rules (revised in 2018)" while serving as a director of china evergrande group, the controlling shareholder of evergrande real estate group co., ltd. the shenzhen stock exchange intends to publicly recognize him as unsuitable for life to serve as a director, supervisor, or senior manager of a bond issuer and publicly reprimand him.unable to contact xia haijun, the shenzhen stock exchange informed xia haijun of the relevant matters of the proposed disciplinary action in the form of an announcement.

daily economic news is compiled from the official website of the china securities regulatory commission and public information

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