Evergrande deal with bank probed

Chinese regulators are reportedly investigating a 10 billion yuan transaction between China Evergrande (3333) and Shengjing Bank (2066), which holds a substantial number of China Evergrande's bonds.

There was no immediate response from the developer and no comment from Shengjing Bank and China Banking and Insurance Regulatory Commission, mainland media reported.

China Evergrande's share traded 2.48 percent lower at HK$12.58 on the news, after rebounding from yesterday's low of HK$12.30. The debt-ridden developer has been scrambling to raise cash as the government tackles what it considers excessive borrowing in the real estate sector with new debt-ratio caps. However, it failed to meet the target last year.

Shengjing Bank's four branches in Shanghai were fined a total of 5.52 million yuan for violating regulations and granting loans to unapproved real estate projects, China Banking and Insurance Regulatory Commission's website revealed on May 13.

An exchange filing shows that China Evergrande held 49.59 percent of domestic shares in Shengjing Bank, amounting to 36.4 percent of the lender's total shares, as of the end of 2020.