China's Evergrande Group, the <a href="https://www.thenationalnews.com/business/money/2022/07/21/how-investors-will-benefit-from-dubais-new-law-on-real-estate-funds/" target="_blank">property</a> developer at the centre of a $300 billion liquidity firestorm, announced that it has fired its senior executives in the aftermath of an internal investigation into why banks seized more than 13.4bn yuan ($2bn) from the company's property services arm. The company forced out chief executive Xia Haijun and chief financial officer Pan Darong, who were both involved in the “deposits”, which were used as “security for third party pledge guarantees”, the company said in <a href="https://www1.hkexnews.hk/search/titlesearch.xhtml" target="_blank">statements to the Hong Kong Stock Exchange</a>, where its shares are listed. Investigators had established that the money was taken because it was being used as a guarantee to allow a third party to obtain a loan, one statement said. “Based on the preliminary findings of the independent investigation committee of the company, the loans secured by the pledges [after deduction of fees] were transferred and diverted back to the group via third parties and were used for the general operations of the group,” it said. It further found that Mr Xia and Mr Pan “participated in the above arrangement. In view of this, the board resolved to request such persons to resign from their positions within the group”. The pledges involved three sets of deposit certificate pledges, including a 2bn yuan deposit certificate pledge guarantee, an 8.7bn yuan deposit certificate pledge guarantee and a 2.7bn deposit certificate pledge guarantee, the statement said. Evergrande appointed Siu Shawn as its chief executive, who will also remain in his current role as an executive director. Qian Cheng, a current vice president, was named chief financial officer and executive director, while Liu Zhen, another vice president, was also appointed as an executive director. Evergrande, one of China's biggest developers, has been embroiled in a liquidity crisis afree property sales dived in 2021, the first annual drop in at least a decade, as the builder slipped into default and buyer confidence faded. The resignations come as Evergrande is fighting for survival and working to reach a restructuring agreement with debtors, to whom it owes an estimated $300bn. Contracted sales dropped 39 per cent to 443bn yuan last year, according to Bloomberg calculations, making it the world’s most indebted developer and one whose sales have been believed to be almost frozen since October, when its liquidity woes intensified. The company's troubles have had a domino effect throughout China's vast property sector, with some smaller firms also defaulting on loans and others struggling to gain enough funding. China's real estate firms have long been heavily dependent on loans to finance their massive developments, but Beijing's push to rein in indebtedness has cut cash flows, leaving these companies in serious problems. This month, Shimao Group Holdings missed payment on a $1bn bond, its first default on a public bond after months of mounting stress. Its delinquency is among the biggest dollar payment failures so far this year in China. In a separate statement, Evergrande said there was “no disagreement” between Mr Zia and Mr Pan and its board of directors, and that there was no need to further escalate the matter to its shareholders. In recent months, Evergrande has rushed to offload its assets, with its chairman Hui Ka Yan resorting to his personal wealth to pay off some of its debts. Evergrande halted trading in its shares on January 3 after local media reported that <a href="https://www.thenationalnews.com/business/property/2021/12/31/embattled-china-evergrande-alters-payment-plan-for-its-wealth-unit-investors/">the company</a> has been ordered to tear down apartment blocks in a development in Hainan province. It resumed trading the following day.