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       China Evergrande’s Crash Was Accelerated by Questionable Accounting

       Blame for the property developer’s downfall has been placed on Chinese lending policies, but poor corporate oversight was hiding in plain sight.

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       Unfinished construction by China Evergrande in Dongguan in Guangdong Province in 2021. Credit...Gilles Sabrié for The New York Times

       By Alexandra Stevenson

       Alexandra Stevenson, who traveled in China to cover the last years of the property boom, reported this article from Hong Kong.

       Dec. 5, 2023

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       In January, more than 100 financial sleuths were dispatched to the Guangzhou headquarters of China Evergrande Group, a real estate giant that had defaulted a year earlier under $300 billion of debt. Its longtime auditor had just resigned, and a nation of home buyers had directed its ire at Evergrande.

       Police on watch for protesters stood guard outside the building, and the new team of auditors were issued permits to get in. After six months of work, the auditors reported that Evergrande had lost $81 billion over the prior two years, vastly more than expected.

       But they still had questions. Some records they had requested from Evergrande were incomplete. Numbers were missing. Important accounting errors or misstatements may have gone undetected. How had things at Evergrande — once one of China’s most successful companies — gone so wrong?

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       Alexandra Stevenson is the Shanghai bureau chief for The Times, reporting on China’s economy and society. More about Alexandra Stevenson

       A version of this article appears in print on Dec. 5, 2023, Section B , Page 1 of the New York edition with the headline: A Spectacular Crash With Blame to Go Around . Order Reprints | Today’s Paper | Subscribe

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