More Heads Roll In China's Evergrande Collapse

Embattled Chinese real estate developer Evergrande lopped off a few more executive heads on Friday, with CEO Xia Haijun and CFO Pan Darong both being forced to resign over mishandled deposits.

Evergrande had been investigating how 13.4 billion yuan ($1.99 billion) of its deposits were used as security for third parties to obtain bank loans, which some borrowers then failed to pay back. The pledge guarantees threatened to wipe out most of the cash holdings at its property-services unit. 

Such misuse of corporate funds is a primary reason developers such as Evergrande have exhausted their funds even as they have housing projects to complete and suppliers to pay back.

As is usually the case when asset bubbles finally burst, corruption plays a key role.