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Financials

China Evergrande lawsuits to be centralised at Guangzhou court - sources

HONG KONG/BEIJING, Aug 6 (Reuters) - Lawsuits against heavily indebted China Evergrande Group across the country will be centrally handled by the Guangzhou Intermediate People’s Court, according to two legal sources who have knowledge on the matter.

They said local courts and lawyers involved in Evergrande cases have received notice that the initial legal proceedings will be transferred to the Guangzhou court.

Chinese financial news outlet Caixin first reported the move on Thursday evening.

Evergrande did not immediately respond to request for comment.

More suppliers and contractors are suing Evergrande over late payments, with some requesting courts freeze its assets, as worries over the developer’s financial health intensified after late payments on commercial paper.

The Wuxi Intermediate People’s Court last month ordered a freeze on a $20.37 million bank deposit held by Evergrande and its unit at the request of China Guangfa Bank Co.

Separately, a Hubei court last week ordered a freeze on Evergrande’s shares in Langfang Development for three years.

A lawyer told Reuters the decision to centralise the cases at one court will prevent Evergrande’s assets being sliced up by different lawsuits, which is positive to the developer.

“But it runs against the legal principle of protecting the interests of the majority,” he added.

S&P Global downgraded the ratings of Evergrande by two notches to “CCC” on Thursday evening, citing an escalating risk of non-payment of debt.

Reporting by Clare Jim in Hong Kong and Cheng Leng in Beijing; Editing by Sam Holmes

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