(MENAFN) The China Financial Markets Regulatory Authority has taken a significant step by filing charges against Evergrande, along with its founder Hui Kayan, alleging the inflation of revenues from the Chinese mainland by approximately USD80 billion during the years 2019 and 2020. These detailed accusations mark the first comprehensive legal action taken by authorities, shedding light on the financial practices that contributed to the challenges faced by one of the world's most indebted real estate developers.

In response to the allegations, the Chinese Financial Markets Regulatory Authority has proposed imposing a substantial fine of 4.2 billion yuan (USD580 million) on Evergrande's mainland subsidiary, Hengda Real Estate. This decision, disclosed in documents submitted by the company to the Shenzhen and Shanghai stock exchanges, highlights charges of falsifying financial documents in official reports.

The documents further reveal a preliminary ruling from the regulatory authority, indicating that Hui Kayan, once regarded as China's wealthiest individual, could face a fine of 47 million renminbi. Additionally, he may be permanently barred from trading in the country's financial markets, accused of issuing directives to employees aimed at artificially inflating the company's performance metrics.

This development represents a significant turning point in Evergrande's prolonged struggle, characterized by a lack of transparency that has left international investors in the dark. Despite attracting more than USD20 billion in investments from abroad, Evergrande's complex structure, comprised of numerous residential projects, has long posed challenges for investors seeking clarity on its financial health and practices. The regulatory charges underscore the intensifying scrutiny facing Evergrande and the imperative for greater transparency and accountability within China's real estate sector.

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