China Evergrande gets court notice regarding unit’s $280 million recovery claim

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By Robert Fofana

China Evergrande gets court notice regarding unit’s 0 million recovery claim
© Reuters. FILE PHOTO: A crane stands at a construction site near the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China, Sept. 26, 2021. REUTERS/Aly Song/File Photo

(Reuters) -China Evergrande Group said on Tuesday it received notices from court of Guangdong Province over a claim by a unit of Evergrande Property Services for the recovery of about 2 billion yuan ($280 million) in deposit certificate pledge guarantees.

The proceedings brought by unit Jinbi Property Management Company are related to the enforcement of Evergrande Property Services’ deposit pledge of about 13.4 billion yuan.

The embattled property developer said the notices regarding the claim also includes an estimated interest of 152.1 million yuan.

Last week, Evergrande Property Services received a notice from the Guangzhou Intermediate People’s Court of Guangdong Province formally accepting the filing of the case.

Parent Evergrande had said in February it was in talks with Evergrande Property Services to repay the funds.

In July 2022, Evergrande’s chief executive and its finance head resigned after a preliminary probe found their involvement in diverting loans secured by Evergrande Property Services.

Evergrande was investigating how deposits worth 13.4 billion yuan belonging to Evergrande Property Services were used as collateral for pledge guarantees and seized by banks.

Evergrande said it would seek legal advice regarding the notices.

($1 = 7.1429 renminbi)

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