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China Evergrande (3333.HK, delisted) has seen fresh progress in its liquidation. On October 22, 2026, the liquidators of China Evergrande released their second liquidation progress report, covering major developments in the liquidation work during the period from August 1, 2025 to September 30, 2026.
The liquidation progress report shows that as of September 30, 2026, the liquidators of China Evergrande had realized approximately HK$3.4 billion (about US$435.9 million) from the group's assets, while the liquidators had received 200 proofs of claim, with total claims asserted amounting to approximately HK$360 billion (about US$46 billion). The amount realized so far represents less than 1% of the total claims. Of the HK$3.4 billion realized, approximately HK$90.5 million came from assets directly held by China Evergrande, mainly including the realization of partial equity interests in Evergrande Property Services Group Ltd (ASX: 06666) and Evergrande New Energy Vehicle Group Ltd (ASX: 00708); the remaining approximately HK$3.3 billion came from subsidiaries, mainly including accounts receivable, bank deposits, disposal of artworks, shareholding gains and investment income. Of the subsidiary realization proceeds, approximately HK$2.1 billion has been transferred to the company, while approximately HK$1.2 billion remains in subsidiaries controlled by the liquidators. Among these, accounts receivable are currently the most important source of recovery, amounting to HK$2.31 billion. The liquidators also sold 96 of 107 artworks, including works by Picasso and Monet, generating approximately HK$225 million. However, the liquidators stated that these artworks are in poor condition, and the remaining artworks are expected to bring limited recovery amounts in the future.
In addition, while examining the accounts, the liquidators discovered a prepayment of approximately HK$111 million (about US$14.3 million) on the books. This payment originated from a letter of intent signed in February 2020 between China Evergrande, the Guangzhou Institute of Respiratory Health and a university in the United States for related scientific research projects. As of July 2021, approximately US$11.1 million of it had been used, with US$3.2 million remaining unused. After analysis and obtaining legal advice, the liquidators believe that China Evergrande is entitled to demand the return of US$2 million of the prepayment, and have sent a letter to the university demanding payment. The two parties are currently negotiating a settlement. The subsequent progress of asset recovery and the results of claim verification will be the focus of market attention.
The liquidators of China Evergrande stated that they expect to declare the first interim distribution in the first half of 2027, but the specific distribution ratio has not yet been determined. The liquidators said they will continue to seek the maximum recovery for creditors while advancing the adjudication of claims.
In addition to these amounts that have already made progress, the liquidators will also pursue other large sums in the future, namely the sale of the controlling stake in Evergrande Property Services Group Ltd, litigation recovery against former management and related parties, and litigation recovery against the auditor PricewaterhouseCoopers (PwC).
The controlling shareholder of Evergrande Property Services Group Ltd is China Evergrande, and it is currently one of China Evergrande's most valuable assets. At the time of its listing, China Evergrande directly and indirectly held 59.04% of the equity in Evergrande Property Services Group Ltd; as of September 30, 2026, its shareholding ratio had dropped to 51.01%. As early as 2021, Hong Kong-listed property developer Hopson Development Holdings planned to acquire 50.1% of the equity in Evergrande Property Services Group Ltd for HK$20.04 billion. However, the two sides failed to reach agreement on payment terms, general offer conditions and other aspects, and the deal ultimately fell through. Thereafter, due to the unsuccessful debt restructuring of China Evergrande, the sale of Evergrande Property Services Group Ltd was also shelved for a time. It was not until September 2025 that the liquidators of China Evergrande stated they were seeking opportunities to sell shares of Evergrande Property Services Group Ltd and would negotiate transaction terms with buyers around November 2025. However, on June 25, 2026, Evergrande Property Services Group Ltd announced that negotiations between the liquidators of China Evergrande and the intended acquirer had been terminated, and the two sides had not signed a formal transaction agreement. Thereafter, the liquidators restarted the sale process in July 2026 and signed an exclusivity agreement with a selected bidder in September, with negotiations still ongoing, and the exclusivity negotiation period extending to October 27, 2026. The progress of this transaction will affect the liquidators' subsequent recovery and disposal of related assets.
Litigation compensation against former management and related parties of China Evergrande began in 2024. Starting in March 2024, the liquidators, in the name of China Evergrande, sued seven defendants including former chairman Hui Ka Yan, former chief executive Xia Haijun and former chief financial officer Pan Darong, seeking approximately US$6 billion in dividends and remuneration. On August 20, 2026, the Shenzhen Intermediate People's Court of Guangdong Province held a hearing in the Evergrande series of cases, and Hui Ka Yan was sentenced in the first instance to life imprisonment, deprived of political rights for life, and had all his personal property confiscated. On September 30, 2026, the liquidators also filed two lawsuits in the name of Hui Ka Yan with the Hong Kong High Court, respectively seeking payment from Zhang Songqiao (chairman of the board of Central China Real Estate) and Jiang Dalong (former chairman of Evergrande New Energy Vehicle Group), with the two cases involving a total amount of approximately HK$19.15 billion.
The liquidation progress report shows that in order to protect relevant assets, the court has issued freezing orders on the global assets of Hui Ka Yan, Xia Haijun and Ding Yumei (Hui Ka Yan's ex-wife). Among them, the freezing order caps for Hui Ka Yan and Xia Haijun are both HK$60 billion, and that for Ding Yumei is HK$2.8 billion. The liquidators are also participating in the takeover of Hui Ka Yan's assets, while assets related to Xia Haijun are handled by receivers. At present, asset recovery still faces enforcement difficulties. The liquidators stated that gaining a full picture of the assets held by Hui Ka Yan and Xia Haijun faces major obstacles, and they are conducting investigations or seeking court assistance through judicial jurisdictions including Hong Kong, the United Kingdom, the United States, Canada and the British Virgin Islands. However, the relevant recovery procedures are still affected by factors such as asset disclosure, the degree of cooperation and the progress of judicial proceedings.
As the former auditor of the Evergrande group, PricewaterhouseCoopers has faced lawsuits since 2024. PwC was involved in the financial fraud of the "Evergrande group" for the 2019 and 2020 fiscal years, and the liquidators filed lawsuits with the Hong Kong High Court twice, in 2024 and 2025, seeking a total of RMB 57 billion in compensation from three parties: PwC Hong Kong, PwC Zhong Tian (PwC's member firm in mainland China) and PwC International, making this case one of the largest corporate compensation cases in the history of the Hong Kong courts. At that time, PwC International argued that it was merely a "coordinator" of the global network and did not directly undertake audit work, and applied to be removed from the list of defendants. However, the Hong Kong High Court dismissed the removal application in August 2026, and PwC International must continue to defend itself as a defendant against the huge claim. Thereafter, PwC International has filed a summons seeking leave to appeal against the court's ruling, and the relevant hearing is expected to be scheduled for November 2026.
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