Sunday, October 24, 2021

Chinese developer Evergrande reaches out to investors: ‘It is necessary to put a final stamp on this’

After nearly four years of allegations of corruption and fraud, a much-maligned Chinese retailer said Wednesday that its investigations into an accounting scandal would be “finalised” by the end of July and that it would return to “normalcy.”

The comments from Evergrande chairman Xu Jiayin were his first public remarks since the scandal and warned against speculation of more missteps by the company.

Evergrande, one of China’s largest developers, has faced fierce criticism from Chinese authorities and even had its banking license suspended, and its share price plummeted nearly 50 percent in the past two weeks.

Xu said that the company had provided over 4,000 hours of self-evaluation, sought outside analysis and obtained an external audit firm.

“It is necessary to put a final stamp on this so that the path for normalcy becomes clear,” he said. “But the stain of the last four years is still very dark.”

He added that the company had been taken to task for its dubious accounting and fiscal practices. “We apologize to our shareholders, customers and all those who had faith in us.”

Evergrande said earlier this month that a securities probe would conclude soon, after which the government and the audit committee would take over.

The company was accused of fraud by China’s top securities regulator this month, but Xu said Wednesday that the regulators had not publicly announced the results of the probe.

Evergrande had to miss the opening ceremony of the Beijing International Design Festival on Tuesday because the regulators had ordered it to stop issuance of its financial reports.

The company said it had already received all the necessary legal documentation to the financial department from the audit committee’s investigation.

“I have the confidence that today is the dark moment which will bring us success in the future,” Xu said.

Click for more from The Wall Street Journal.

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