(Yicai) Nov. 29 -- Evergrande Property Services Group is suing its owner, embattled real estate giant China Evergrande Group, for using CNY13.4 billion (USD1.9 billion) of its deposits as collateral to raise funds that have subsequently been appropriated by banks.

Evergrande Property’s unit Jinbi Property has already started legal proceedings to recover around CNY2 billion (USD281.2 million) plus interest of about CNY152 million (USD21.4 million) from five related parties, including its parent firm, the Hong Kong-based subsidiary said yesterday.

In March last year, when preparing its annual financial report for 2021, Evergrande Property discovered that CNY13.4 billion of its funds had been withdrawn by banks. It turned out through an investigation headed by China Evergrande that, between Dec. 28, 2020 and Aug. 2, 2021, six companies affiliated to Evergrande Property offered the property manager’s bank deposits as a guarantee to eight banks to raise funds which were intended for China Evergrande. When the conditions were triggered for executing the liens, the lenders withdrew the deposits.

Whether Evergrande Property will ever be able to get its money back is uncertain. China Evergrande has been in financial difficulties since the second half of 2021 and its Chairman Xu Jiayin, also known as Hui Ka-yan in Cantonese, was detained by police in September for alleged crimes, putting the developer’s debt restructuring on ice.

Evergrande Property’s share price [HKG:6666] was trading flat at 1 p.m. today, with a market capitalization of HKD4.9 billion (USD622.8 million).

Editor: Kim Taylor