SFC Moving Ahead With HK$1 Billion Evergrande Payout Plan

Hong Kong's Securities and Futures Commission (SFC) is moving forward with its plan to distribute HK$1 billion (approximately $128 million) to minority shareholders of the defaulted property developer China Evergrande Group. The SFC announced on May 21, 2024, that it would proceed with the scheme despite a legal challenge filed by the company's joint and several liquidators. The liquidators had sought to halt the SFC's distribution plan, arguing it would prejudice the interests of the company's creditors. However, the SFC stated that the scheme was designed to provide compensation to retail investors who suffered losses due to Evergrande's collapse. The SFC's proposed distribution plan was approved by the High Court of Hong Kong in December 2023. This decision allows the SFC to use funds it recovered from a settlement with Evergrande's former chairman, Hui Ka Yan, to compensate eligible minority shareholders. The SFC aims to mitigate losses for individual investors who were heavily invested in the now-defunct property giant. The legal challenge by the liquidators, who are responsible for winding up Evergrande's affairs and repaying its debts, had raised concerns about the priority of claims. The SFC's commitment to the plan underscores its focus on protecting retail investors in the market.