China court accepts Evergrande unit bankruptcy liquidation case

A court in the southern Chinese city of Guangzhou has accepted a bankruptcy liquidation case involving Hengda Real Estate Group, the mainland property unit of China Evergrande Group.

The Guangzhou Intermediate People’s Court said on August 21 that it had accepted an application filed by Guangzhou Rural Commercial Bank, citing Hengda Real Estate’s inability to repay its debts and insufficient assets to cover its liabilities, Reuters reports.

The development comes a day after Evergrande founder Hui Ka Yan was sentenced to life in prison. Hui, who founded the heavily indebted property developer, pleaded guilty in April to eight charges, including misuse of funds, fundraising fraud and illegally accepting public deposits.

Evergrande’s collapse five years ago sent shockwaves through China’s property sector and financial markets, contributing to a prolonged real estate crisis.

By Sabina Mammadli