THE liquidators of failed property developer China Evergrande have launched an effort in a Hong Kong court to recover US$6 billion from its founder Hui Ka Yan and other top company executives, yicai.com reported.

The legal proceedings, detailed in a filing to Hong Kong’s stock exchange late Monday, mark the first public effort by the liquidators to recover assets from Hui since a judge ordered the winding up of Evergrande’s locally listed entity in January.

Edward Middleton and Tiffany Wong of restructuring firm Alvarez & Marsal, who were appointed acting as liquidators of the company, made the filing on its behalf Monday.

They said the proceedings at Hong Kong’s high court aimed to “recover” funds including “dividends and remuneration” worth a total of about US$6 billion from Hui, former Evergrande chief executive Xia Haijun, former chief financial officer Pan Darong, and four other individuals and entities.

The claim was based on allegedly “misstated” financial statements made by the Hong Kong-listed company for the financial years 2017 to 2020, it said.

The legal proceedings began in March but were previously under confidentiality orders lifted this month, the filing said. It added the proceedings were ongoing and there was no certainty any of the money could be recovered.

Many of Hui’s assets in Hong Kong, including three luxury mansions linked to him, have already been seized or sold, while most of Evergrande’s assets are held on the Chinese mainland.

Last September, Evergrande announced it received a notification from relevant authorities that Hui had been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes. It also informed investors that its shares （HK: 3333） had suspended trading Sept. 28.

In Monday’s statement, Evergrande noted that its stock trading will remain suspended until further notice.

The China Securities Regulatory Commission said in March that Hui and Evergrande’s mainland business had inflated revenues by US$78 billion over 2019 and 2020. It fined Hui more than US$6 million and Evergrande’s unit Evergrande Real Estate Group nearly US$580 million.

Evergrande used Pricewater-houseCoopers as its auditor for 14 years between 2009 and January last year, when the pair broke their partnership.

Meanwhile, Evergrande New Energy Vehicle Group, Evergrande’s electric vehicle arm, said Monday a local court had ruled that two of its units should enter into bankruptcy and be reorganized, a week after individual creditors of the units filed for such proceedings.

The firm said a local court hearing was held Aug. 2, and the court ordered the units to enter into such proceedings.

Evergrande NEV’s net loss narrowed 56% to 12 billion yuan (US$1.7 billion) last year from the previous one, according to the company’s latest annual earnings report.

As of the end of last year, Evergrande NEV had delivered over 1,300 cars.

(SD-Agencies)