Hong Kong real estate agencies sue Evergrande to recover commissions

HONG KONG (Reuters) – Two Hong Kong real estate agencies are suing heavily indebted China Evergrande group over unpaid commissions, court filing and news reports say, putting pressure on the developer as he scrambles to raise funds and avoid a collapse.

Centaline filed a lawsuit against Evergrande in September to recover HK $ 3.1 million ($ 398,196) in overdue commissions, court records show, while the South China Morning Post newspaper reported that Midland Holdings is claiming an unpaid commission of HK $ 43.45 million for two developments in Hong Kong.

A Centaline China executive told Reuters they also filed a lawsuit against Evergrande in a Guangzhou court in southern China, seeking to claim hundreds of millions of yuan owed to it.

Centaline confirmed to Reuters that it filed a complaint in Hong Kong last month, but declined to comment further. Midland declined to comment, saying the case was in court proceedings. Evergrande did not immediately respond to a request for comment.

Hong Kong’s exposure to debt-laden developer China Evergrande is “very minimal” at 0.05%, or 14 billion Hong Kong dollars ($ 1.79 billion) in bank assets and will not cause any systemic risk , the newspaper reported on Sunday, quoting the city’s finance secretary, Paul. Chan.

Evergrande is committed to reimbursing its suppliers and contractors in mainland China as soon as possible, in some cases offering apartments or other real estate assets, as construction at many of its sites has been halted due to delays in payment.

With liabilities of $ 305 billion, Evergrande has raised fears that its lack of liquidity will spill over into China’s financial system and spill over into the world, a concern that has eased with China’s central bank’s wish for the last week to protect the interests of home buyers.

Growing concerns about Chinese property developers’ defaults sparked a rout of their stocks and bonds on Tuesday with further credit rating downgrades and uncertainty over the fate of the cash-strapped China Evergrande group, undermining sentiment among investors. investors.

Last month it missed coupon payments on tranches of two-dollar bonds and is working to sell assets to pay off creditors, prioritizing repayment to onshore lenders in recent weeks.

($ 1 = 7.7851 Hong Kong dollars)

(Reporting by Donny Kwok and Clare Jim; Editing by Kim Coghill)

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