Not long ago, the High Court of Hong Kong formally ruled that China Evergrande was liquidated. It is reported that the main body involved in the liquidation is China Evergrande, which is listed in Hong Kong, and the management and operation system of Evergrande Group will remain unchanged. As for the question of whether Evergrande's domestic business will be affected, some industry insiders pointed out that mainland home buyers still have legal priority rights in accordance with the law.
It is reported that the liquidation order of China Evergrande occurred on January 29, and the judge said that the debt restructuring plan of China Evergrande lacked progress and the company was insolvent, and officially ordered Evergrande to be liquidated. On the same day, Sean, CEO of Evergrande Group, responded, "Today's court ruling is contrary to our original intention, and we can only say that we have done our best and regret it."
Sean also said that the group will do everything possible to ensure the stability of domestic business and operation, steadily promote key tasks such as ensuring the delivery of buildings, maintain the quality of property services will not be affected, make every effort to ensure the smooth promotion of risk resolution and asset disposal, and try its best to promote various tasks fairly in accordance with the law.
Industry insiders pointed out that the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and the Hong Kong Special Administrative Region clearly stipulates several exclusions, and bankruptcy (winding-up) cases are among them. In other words, Evergrande's winding-up case by the Hong Kong High Court was not directly recognized by the Mainland. At the same time, the Record of Meeting on Reciprocal Recognition of and Assistance to Insolvency Proceedings by the Courts of the Mainland and the Hong Kong Special Administrative Region signifies that Chinese Mainland and Hong Kong have reached a consensus on recognising and assisting insolvency proceedings, and the Opinions on Launching a Pilot Project on Recognising and Assisting Insolvency Proceedings in the Hong Kong Special Administrative Region provide that liquidators in Hong Kong in the three pilot cities of Shanghai, Shenzhen and Xiamen may apply to the local courts for recognition and assistance.
In general, Evergrande Group's offshore debts account for a small proportion of the total debts, and the impact of this overseas liquidation on Evergrande Group's domestic business is much smaller than the psychological impact of the liquidation order on the market, and for mainland home buyers, they still have legal priority rights in accordance with the law.