Evergrande wins HK$6b debt-recovery case after court rejects ‘fabricated’ claims

A Hong Kong court has ruled in favour of embattled conglomerate Evergrande in a debt-recovery case, allowing it to recoup about HK$6 billion (US$764.7 million) from a third party after a judge found the borrower’s arguments against enforcement of the loan were “fabricated”.

In a High Court judgment handed down on Friday and seen by the South China Morning Post, Judge Linda Chan dismissed an injunction application filed by Yingjia International Properties to restrain offshore entity State Hero Holdings from presenting a winding-up petition against it.

The court also rejected Yingjia’s separate bid for an interim injunction to block State Hero from filing the winding‑up petition pending a possible appeal.

State Hero is an indirect wholly owned subsidiary of China Evergrande Group, which is now controlled by court-appointed liquidators. It served a statutory demand on February 13 this year on Yingjia International requiring the repayment of HK$5.97 billion in loan principal and accrued interest.

The court heard that the debt stemmed from March 2021, when State Hero reached an agreement in Hong Kong to lend HK$5 billion to Yingjia International, repayable in a single tranche within two years to avoid interest. Failure to repay by the deadline would trigger annual interest at 4 per cent.

The fund was transferred a month later to Honour Best International Trade to subscribe for 183 million new shares issued by China Evergrande New Energy Vehicle Group (NEV).