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"the man xu jiayin trusts most" was severely punished! his annual salary was as high as 270 million yuan, and he was called the "working emperor"

2024-09-26

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on september 25, the china securities regulatory commission issued an administrative penalty decision (xia haijun), who was then the vice chairman and president of the board of directors of china evergrande group. the csrc decided:in response to the illegal act of evergrande real estate disclosing false statements in its 2019 and 2020 annual reports, xia haijun was given a warning and fined rmb 5 million; in response to the fraudulent issuance of corporate bonds by evergrande real estate, xia haijun was fined rmb 10 million.

in view of the fact that xia haijun organized and arranged the preparation of false financial reports with particularly bad means and serious circumstances, xia haijun will be banned from the securities market for life.

illegal facts

the china securities regulatory commission issued an administrative penalty decision against xia haijun, then vice chairman and president of china evergrande group. xia was given a warning and fined rmb 5 million for evergrande real estate's illegal disclosure of false records in its 2019 and 2020 annual reports; and was fined rmb 10 million for 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.

known as "the man xu jiayin trusts most"

xia haijun was once known as the "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 was previously known as "xu jiayin's most trusted man." as xu jiayin's right-hand man, he had been the "number two man" of evergrande for many years, and xu jiayin had repeatedly let him handle the media at performance meetings alone.in the entire real estate industry, xia haijun is also one of the professional managers with the longest working experience.

xia haijun also received a ceiling-level salary.in 2017, forbes released the "hong kong-listed chinese ceo salary list", and xia haijun topped the list with 270 million yuan.according to evergrande's annual report, xia haijun's salary at evergrande group was still as high as 202 million yuan and 204 million yuan in 2021 and 2020.

but on july 22, 2022, china evergrande issued an announcement announcing that xia haijun had resigned as the company's executive director and ceo.

during the difficult crisis of evergrande, xia haijun 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.