Evergrande Xia Haijun was fined again.
On May 13, Shenzhen Stock Exchange issued a notice of service of the "Prior Notice of Disciplinary Action" on the homepage of its official website, which said that Xia Haijun was suspected of violating the relevant provisions of Articles 1.5 and 1.6 of the Rules Governing the Listing of Corporate Bonds (Revised in 2018) of Shenzhen Stock Exchange while serving as a director of China Evergrande Group, the controlling shareholder of Evergrande Real Estate Group Co., Ltd.
Shenzhen Stock Exchange plans to publicly determine that he is unfit to serve as a director, supervisor, senior manager of the bond issuer for life and publicly condemn him. According to the data, Xia Haijun was once the vice chairman and president of Hengda Group.
It is worth mentioning that in March this year, the CSRC issued a notice of administrative punishment and market access prohibition to Xu Jiayin and Xia Haijun. Xia Haijun was warned and fined 15 million yuan for suspected false records in the annual report and fraudulent issuance, and Xia Haijun was banned from entering the securities market for life.
Shenzhen Stock Exchange shouts Xia Haijun to get a ticket
On May 13, the Shenzhen Stock Exchange issued an announcement indicating that Xia Haijun, as a director of China Evergrande Group, the controlling shareholder of Evergrande Real Estate Group Co., Ltd., was suspected of violating Articles 1.5 and 1.6 of the Rules Governing the Listing of Corporate Bonds (Revised in 2018).
In accordance with the provisions of Article 8.3 of the Listing Rules for Corporate Bonds (Revised in 2018), Article 45 of the Implementation Rules for Self discipline Supervision Measures and Disciplinary Actions (Revised in 2018), and Article 46 of the Implementation Measures for Self discipline Supervision Measures and Disciplinary Actions (Revised in 2020), Shenzhen Stock Exchange plans to publicly identify Xia Haijun as unfit to serve as a director, supervisor The punishment of senior management and public censure.
Due to the inability to contact Xia Haijun, Shenzhen Stock Exchange now informs Xia Haijun of the proposed disciplinary action in the form of announcement. Xia Haijun is also requested to get the Disciplinary Action Notice in advance from the Shenzhen Stock Exchange within ten days from the date of announcement. If he fails to get the Notice within the time limit, it will be deemed to have been served upon the expiration of the above time limit, and the Shenzhen Stock Exchange will make a formal punishment decision in accordance with relevant regulations.
SZSE said that Xia Haijun has the right to make statements and defend in accordance with the provisions of the Measures for the Implementation of Self regulatory Measures and Disciplinary Actions. If Xia Haijun has any objection to the proposed disciplinary action mentioned above, he shall submit a written statement and defense to Shenzhen Stock Exchange within the time specified in the Notice of Disciplinary Action in Advance and provide relevant evidence. According to the Rules on Self discipline Supervision Hearing Procedure, Xia Haijun can also apply for a hearing. If he applies for a hearing, he should submit it to Shenzhen Stock Exchange in writing within the time specified in the Notice of Disciplinary Action in Advance, and submit written statements, defenses and other materials. If it fails to do so within the time limit, it shall be deemed as waiving the right of hearing, statement and defense.
As far as China Evergrande is concerned, it is currently in liquidation and has been suspended on January 29 this year. On April 30 this year, China Evergrande announced that the publication of the annual results of the year ended December 31, 2023 was delayed because "the joint and separate liquidators are now investigating the current affairs of the company, preparing the financial statements of the company for the year ended December 31, 2023, and publishing the annual results of 2023 is delayed". In the future, a separate announcement will be issued on the 2023 annual performance and the publication date of the 2023 annual report in accordance with the listing rules.
The CSRC has punished him before
In fact, the CSRC had already punished Xia Haijun before the Shenzhen Stock Exchange issued a notice of disciplinary punishment in advance.
On March 18 this year, Evergrande Real Estate released a notice on receiving the advance notice of administrative penalty and market access prohibition from the CSRC, which will impose administrative penalties such as fines and market access prohibition on Evergrande Real Estate, Xu Jiayin, Xia Haijun, Pan Darong, Pan Hanling, Ke Peng, Zhen Litao and Qian Cheng.
The CSRC has found out that Evergrande Real Estate, Xu Jiayin, Xia Haijun and others are suspected of violating the law, mainly including the following three facts:
First, there are false records in the 2019 and 2020 annual reports disclosed by Evergrande Real Estate. Evergrande Real Estate's financial fraud through revenue recognition in advance led to a false increase in revenue of 213.989 billion yuan in 2019, accounting for 50.14% of the current operating revenue, the corresponding false increase in costs of 173.267 billion yuan, and the false increase in profits of 40.722 billion yuan, accounting for 63.31% of the total profits of the current period; In 2020, Evergrande Real Estate falsely increased its revenue by 350.157 billion yuan, accounting for 78.54% of the current operating revenue, corresponding to a falsely increased cost of 298.868 billion yuan, and falsely increased profits of 51.289 billion yuan, accounting for 86.88% of the total profits of the current period.
Second, Evergrande Real Estate's public issuance of corporate bonds was suspected of fraudulent issuance. The CSRC pointed out that Evergrande Real Estate issued four bonds in 2020, with a total amount of 12.6 billion yuan and 8.2 billion yuan on April 27, 2021. As the issuance documents announced in the issuance process quoted the relevant data of 2019 and 2020 annual reports with false records, they were suspected of fraudulent issuance.
Third, Evergrande Real Estate failed to disclose relevant information in a timely manner as required, including Evergrande Real Estate's failure to disclose its 2021 annual report, 2022 interim report and 2022 annual report on schedule, its failure to disclose major litigation and arbitration as required, and its failure to repay due debts as required.
As for Xia Haijun's illegal acts, the CSRC pointed out that Xia Haijun, then the vice chairman and president of Evergrande Group's Board of Directors, actually managed Evergrande Real Estate's daily business affairs as a whole, organized and arranged the preparation of false financial reports, and was the person in charge who was directly responsible for the extremely bad means and serious circumstances.
The CSRC said that Xu Jiayin, then Chairman of Evergrande Real Estate, Xia Haijun, then Vice Chairman and President of China Evergrande's Board of Directors, and others made decisions and organized the implementation of financial fraud. The means were particularly bad and the circumstances were particularly serious. Xu Jiayin and Xia Haijun were fined 47 million yuan and 15 million yuan respectively, and lifelong measures were taken to ban access to the securities market.
