(March 18): The former chairman of China Evergrande Group, the defaulted developer at the heart of China’s real estate crisis, was accused of inflating business revenue by more than US$78 billion (RM368.2 billion) over two years, according to the nation’s top securities regulator.

Evergrande’s onshore unit Hengda Real Estate Group boosted revenue by about 214 billion yuan in 2019 by recognising sales in advance, and another 350 billion yuan in the 2020 annual results, the developer said in a filing Monday, citing a notice from the China Securities Regulatory Commission. The inflated figures accounted for half of total revenue in 2019 and 79% in 2020, according to the regulator.

The CRSC imposed a fine of 47 million yuan on former Evergrande chairman and founder Hui Ka Yan over the falsified results as well as other alleged crimes, and banned him for life from participating in capital markets activities.

CSRC said Hui “instructed other personnel to falsely inflate” the company’s annual results in 2019 and 2020. Hui was the responsible supervisor, and the methods used were particularly “egregious,” the regulator said. Hengda was fined 4.18 billion yuan, according to the preliminary decision by the CSRC.

The regulator also said some Hengda bonds were issued in 2020 and 2021 citing data from 2019 and 2020 reports that had false records and were suspected of fraudulent issuance.

Evergrande was once one of China’s biggest developers, taking on massive amounts of debt to expand across the country as condo sales boomed. Hui’s empire began to unravel after regulators imposed tight restrictions on borrowing, while an economic slowdown and the pandemic crimped sales.

Hui was placed under a type of police control in September. Authorities notified Evergrande at the time that Hui had been subject to “mandatory measures,” due to “suspicion of illegal crimes.”

Once Asia’s second-richest man, worth US$42 billion at his peak in 2017, Hui’s wealth has plummeted to about US$1 billion since then after the developer defaulted on its debt, while its stock tumbled and was eventually suspended from trading.