Evergrande files suit to recover $6b dues

China Evergrande Group and its liquidators are seeking to recover about $6 billion in dividends and remuneration paid to seven people and entities related to the group, the troubled real estate developer said in a filing to the Hong Kong stock exchange late on Monday.

These include the company's former chairman Xu Jiayin, former chief executive officer Xia Haijun, former chief financial officer Pan Darong, and Ding Yumei, who was married to Xu previously and whose current relationship status with him is unclear. The list also includes three economic entities associated with Xu and Ding.

On March 22, the liquidators, acting on behalf of the company, initiated the legal proceedings against Xu, Xia and Pan in the Hong Kong High Court, which have, since then, expanded to the other four additional defendants, according to the filing.

The company said in the filing that approximately $6 billion in dividends and remuneration it seeks to recover were paid to the seven based on the alleged misrepresentations of the company's financial position between 2017 and 2020.

The liquidators have obtained various injunctions in the lawsuit, restricting Xu, Ding and Xia from disposing, selling or reducing the value of their global assets beyond certain specified limits.

These injunctions were first issued in Hong Kong against Xu and Xia on June 24, and have since been expanded to include Ding. The writs related to the lawsuit and the Hong Kong injunctions were previously subject to a confidentiality order issued by the Hong Kong High Court, which was lifted on Friday.

The legal proceedings are ongoing, and there is uncertainty about the likelihood of a successful claim and the amount the company may ultimately recover. The liquidators will make further announcements regarding the aforementioned matters in accordance with the provisions of the listing rules, the company said in the statement. Trading of the company's shares will remain suspended until further notice, it said.