China Evergrande Group founder Hui Ka Yan will be barred from the securities market for life and fined 47 million yuan, after the nation's regulator accused the group's flagship unit, Hengda Real Estate, of inflating results, securities fraud and failing to make timely disclosures.

Hengda said in a filing to the Shenzhen stock exchange that the nation's securities watchdog also penalised the company and several of its former senior executives after an investigation.

The penalty represents the latest challenge for Evergrande, the world's most indebted property developer, which defaulted on its offshore debt in late 2021 and was ordered by the High Court in Hong Kong to liquidate in January.

It also comes days after the China Securities Regulatory Commission vowed to crack down on securities fraud, and protect small investors with "teeth and horns".

Hengda Real Estate said a probe by the commission found that it inflated revenues by 213.99 billion yuan, or half of the total, in 2019. In 2020, sales were inflated by 350 billion yuan, or 78.5 percent of the total, and that the developer issued bonds based on those falsified statements.

Citing the commission's decision, the company said in a statement that Evergrande founder, Hui Ka Yan, was directly responsible at the time, so the misconduct was particularly "egregious and grave in nature".

Other executives punished include Hengda Real Estate's former vice chairman and its former chief financial officer.

Hengda Real Estate will be fined 4.2 billion yuan. (Reuters)