China Evergrande says directors fell ‘below standards’ in property unit probe

China Evergrande says directors fell 'below standards' in property unit probe

(Reuters) – Property developer China Evergrande Group said on Wednesday an independent committee found its directors fell “below standards” through their involvement in diverting loans secured by unit Evergrande Property Services to the group.

Evergrande said it was in talks with the unit to repay the funds involved. In July 2022, Evergrande revealed deposits of about 13.4 billion yuan ($1.96 billion) belonging to the property unit were used as collateral for pledge guarantees by the group.

Evergrandes chief executive and finance chief stepped down when their involvement was unearthed in a preliminary probe.

The independent committee, composed of Evergrandes independent directors to look into the pledge guarantees, noted some employees failed to exercise independent judgement in approving transactions driven by senior executives.

The committee recommended Evergrande appoint an advisor to review its internal controls mechanisms.

($1 = 6.8479 Chinese yuan renminbi)

(Reporting by Harshita Swaminathan; Editing by Devika Syamnath)