Evergrande: Crisis-hit property giant faces deadline after bosses quit

Embattled After losing two executives, Chinese real estate giant Evergrande is expected to announce a rough restructuring plan this week.

The company reports that its chief executive and finance director has resigned after an internal investigation revealed that they misappropriated almost $2 billion (£1.7 billion) in loans.

Evergrande missed a payment late last year and has obligations of over $300 billion.

Traders are alarmed by the turmoil and worry that the property market in China will catch on.

Evergrande announced on Friday that it had discovered chief executive Xia Haijun and chief financial officer Pan Darong were responsible for transferring 13.4 billion yuan ($2 billion; £1.7 billion) in loans secured by its property services unit to the larger group.

Evergrande stated that it was negotiating a payback schedule with its property services division.

Evergrande, the most indebted real estate developer in the world, has struggled to pay off its over $300 billion in liabilities and missed a crucial deadline in December to clear its offshore loan.

Its shares have lost more than 75% of their value in Hong Kong during the past year, and trading in them has been suspended for months.

By the end of the following week, the company should present a tentative debt restructuring plan.

According to estimates, China’s real estate crisis decreased the value of the industry by more than $1 trillion in 2017.

Beijing might act, according to some experts, because of the exceedingly serious potential outcomes of Evergrande’s failure.

According to official figures, China has experienced a decline in home sales for 11 straight months. Since China established a private property market in the late 1990s, that is the longest recession. Due to worries about cash flow, a number of Chinese developers have put a stop to the construction of homes that have already been sold.

Some homebuyers have threatened to cease making mortgage payments in recent weeks until work picks back up.

According to the Shanghai-based E-house China Research and Development Institution, more than 200 projects by at least 80 developers have been impacted.

According to state media, the China Banking and Insurance Regulatory Commission promised to assist local governments in “guaranteeing the delivery of dwellings.”