By Clare Jim and Jason Xue
HONG KONG (Reuters) -China Evergrande Group said on Tuesday the embattled developer would not be able to publish its financial results for last year by March 31 as required by stock listing rules because audit work has not been completed.
Evergrande said in a stock exchange filing that due to the “drastic changes” in its operations since the second half of last year, the auditor has added a large number of additional audit procedures.
Evergrande is the world’s most indebted property developer with over $300 billion in liabilities. Analysts said that the failure of companies to issue 2021 results on time will further weigh down sentiment in the property sector. Over the past few months the sector has been pummelled as investors have sold off shares and bonds on liquidity and financial health concerns.
Evergrande’s filing said it will publish the audited annual results “as soon as practicable” after the audit procedures have been completed, adding a trading suspension in its shares will remain in place until it publishes the latest results.
Evergrande Executive Director Siu Shawn, Non-Executive Director Liang Senlin and Chen Yong, a member of the company’s risk management committee, will hold a call with investors on Tuesday at 1300 GMT, according to an invitation reviewed by Reuters. The invitation did not specifically say what the call would cover.
The company did not immediately respond to a request for comment.
Its two Hong Kong-listed units, China Evergrande New Energy Vehicle Group and Evergrande Property Services Group, also said the publication of their financial results will be delayed.
Nomura said in a report that as of Monday evening, nine Hong Kong-listed property developers, including Evergrande, have not announced their results announcement date, which is required at least seven working days prior to the actual results release.
Evergrande, which has nearly $20 billion of international bonds now deemed to be in default, has been struggling to repay suppliers and creditors and complete projects and homes.
The firm set up a risk management committee in December made up mostly of members from state enterprises, as the Guangdong provincial government is leading its restructuring.
Shares of the three companies were suspended on Monday. Trade in onshore bonds issued by Evergrande’s flagship unit Hengda Real Estate Group was also suspended.
In a separate filing, Evergrande Property Services said around 13.4 billion yuan ($2.1 billion) of its bank deposits that had been pledged as security for third party guarantees had been claimed by the relevant banks.
The property management company said it will set up an independent investigation committee to investigate the pledge guarantees.
Evergrande said in a second filing on Tuesday that because of the operational and financial challenges it is facing the company has proposed to engage King & Wood Mallesons as an additional legal advisor to assist in mitigating the risks relating to its debts and following up with demands from creditors.
($1 = 6.3552 Chinese yuan)
(Reporting by Clare Jim in Hong Kong and Jason Xue in Shanghai; Editing by Edwina Gibbs and Christian Schmollinger)
