Justice Linda Chan ordered the Shenzhen-headquartered company to liquidate its assets, reportedly worth US$240 billion, after 18 months of financial wangling reached a dead end. “It is time for the court to say enough is enough,” she said during Monday’s session.
Evergrande is one of the world’s biggest property developers, and has been dubbed its most indebted. The company defaulted on repayments to investors in 2021, sending shockwaves through China’s property markets.
Restructuring consultancy firm Alvarez & Marsal has been appointed as Evergrande’s liquidator.
The firm’s managing director, Tiffany Wong, was quoted by Reuters as saying that her aim was “to see as much of the business as possible retained, restructured, and remain operational.”
Most of Evergrande’s assets are in the mainland, a different legal jurisdiction to Hong Kong. Reuters reported some speculation around whether Chinese courts would recognise a Hong Kong court’s ruling, and as to how the liquidation process would proceed with so many authorities involved.
The company also has the option to appeal Justice Chan’s ruling.
Evergrande’s executive director, Shawn Siu, described Monday’s verdict as regrettable. He told media that the company would do “everything possible to safeguard the stability of its domestic business and operation,” which he noted were independent of its Hong Kong operations.