Asia Tech Wire (May 23) -- Chinese authorities are demanding that the electric vehicle unit of debt-laden Chinese real estate firm Evergrande Group return 1.9 billion yuan ($262 million) in incentives and subsidies.

China Evergrande New Energy Vehicle Group Ltd (0708.HK), known as Evergrande Auto, released a statement on Wednesday evening, saying that the company and relevant subsidiaries recently received a letter issued by relevant local administrative departments.

The relevant subsidiaries have entered into a series of investment cooperation agreements since April 29, 2019 with the relevant local administrative departments

Evergrande Auto said that due to its failure to fulfill its contractual obligations, the relevant local administrative authorities, in accordance with Chinese laws and regulations, intend to request these subsidiaries to terminate the relevant agreements.

In addition, the authorities have asked the entities to return various incentives and subsidies they have issued totaling about 1.9 billion yuan ($262 million).

The EV unit said, "Currently, the relevant subsidiaries plan to send letters to the relevant local administrative departments for coordination."

It added that trading in the company's shares will remain suspended until further notice.