Securities regulator fines Evergrande and former chairman

China's top securities regulator has imposed its "strictest enforcement" in recent years on Evergrande Real Estate Group and its former chairman Xu Jiayin, signaling a heightened commitment from regulators to restore investor and homebuyer confidence.

The China Securities Regulatory Commission said on Friday that it has imposed severe administrative sanctions against Evergrande Real Estate Group, the flagship subsidiary of real estate developer Evergrande Group, for fraudulent bond issuances and violations in information disclosure.

Evergrande was fined a substantial amount of 4.175 billion yuan (576.5 million) while Xu Jiayin, the then chairman and actual controller of Evergrande, received the maximum legal fine of 47 million yuan and was banned from the securities market for life.

The CSRC found that between 2019 and 2020, Evergrande inflated its revenue and profits by prematurely recognizing income, leading to fraudulent bond issuances. The annual reports disclosed during this period contained false records.

The penalty imposed on Evergrande's fraudulent bond issuances was calculated at 20 percent of the funds raised according to law while information disclosure violations were fined at the maximum legitimate amount.

This marked "the strictest enforcement" since 2019, when a unified enforcement system was founded for both the interbank bond and exchange bond markets, the commission said.