Evergrande’s alleged fraud dwarfs that of Luckin Coffee and Enron Corp, dealing a blow to the reputation of its former auditor and the country’s financial oversight. It fuels concern about how widespread such accounting issues are, just as the new China Securities Regulatory Commission chairman is trying to tighten oversight.
China Evergrande Group’s alleged US$78 billion revenue overstatement escalates the legal peril of founder Hui Ka Yan, who now stands at the centre of one of the biggest financial fraud cases in history.
The nation’s top securities regulator said the developer’s onshore unit inflated revenue by recognizing sales in advance in the two years through 2020 that led up to its default. It imposed a 4.18 billion yuan ($790 million) fine against the unit.
