The beleaguered China Evergrande Group announced its chief executive and chief financial officer will step down after initial findings of an investigation uncovered they were involved in diverting loans secured by its publicly listed unit.
The indebted company was investigating the fate of some 13.4 billion yuan ($1.99 billion) belonging to Evergrande Property Services.
It found the funds “were transferred and diverted back to the group via third parties and were used for the general operations of the group.”
The embattled developer said CEO Xia Haijun and CFO Pan Darong resigned from the group due to their involvement.
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Siu Shawn, who is currently an executive director of the company and chairman of the group’s electric vehicle unit, has been appointed CEO, while vice-president Qian Cheng has been named CFO, the company said.
China Evergrande said it is in talks with Evergrande Property Services about repaying the diverted funds, probably through transferring assets.
The developer said it would consider appointing an internal controls consultant to conduct a comprehensive review of the company’s risk management systems in view of the initial findings.
- Reuters, with editing by Neal McGrath