China Evergrande ordered to pay $111 million in arbitration against unit, exec

(Reuters) – Property developer China Evergrande Group said on Friday it has received an enforcement notice from the court in relation to arbitral proceedings against its unit and executive director by Hexin Hengju (Shenzhen) Investment Holding Center.

The group said the enforcement notice requires it to pay compensation of about 770 million yuan ($111.40 million) to the claimant, among other required payments.

The proceedings involve deals entered into by the claimant, the company’s unit Guangzhou Kailong Real Estate and its executive director Hui Ka Yan between December 2016 and November 2020.

Under the deals, the claimant injected 5 billion yuan into Hengda Real Estate, another unit of China Evergrande, to buy a 1.6% stake.

The deals later fell through as certain obligations were not fulfilled.

The court notice requires the unit Guangzhou Kailong and Hui Ka Yan to pay the top-up amount for the outstanding dividends from Hengda Real Estate for 2020 of about 204 million yuan, and liquidated damages of about 51.53 million yuan to the claimant.

The notice also requires Hui and the company to repurchase the stakes in Hengda Real Estate held by the claimant for 5 billion yuan.

($1 = 6.9121 renminbi)