A Hong Kong court has ruled in favor of the embattled conglomerate China Evergrande Group in a significant debt-recovery case. The ruling allows Evergrande to recoup approximately HK$6 billion (US$764.7 million) from a third party after the judge found the borrower’s arguments against loan enforcement to be “fabricated.”
In a High Court judgment handed down on Friday, Judge Linda Chan dismissed an injunction application filed by Yingjia International Properties. The injunction sought to restrain State Hero Holdings, an offshore entity and indirect wholly owned subsidiary of China Evergrande Group, from presenting a winding-up petition against Yingjia.
The court also rejected Yingjia’s separate bid for an interim injunction to block State Hero from filing the winding-up petition pending a possible appeal.
State Hero served a statutory demand on February 13, 2026, requiring Yingjia International to repay HK$5.97 billion in loan principal and accrued interest. The debt originated from a March 2021 agreement in Hong Kong, whereby State Hero lent HK$5 billion to Yingjia International, repayable in a single tranche within two years to avoid interest. Failure to repay by the deadline would trigger an annual interest rate of 4 percent.
The loaned funds were transferred a month after the agreement to Honour Best International Trade to subscribe for 183 million new shares issued by China Evergrande New Energy Vehicle Group (NEV).
This ruling marks a legal victory for Evergrande amid ongoing financial challenges and court-appointed liquidators overseeing the group.
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