Shares of troubled Chinese developer China Evergrande Group are down 25 percent today. They are responding to a report that police have detained some employees of the company’s wealth management unit. That, according to Reuters, could mean a new investigation that could deepen the real estate company’s troubles. Evergrande is the most indebted developer in the world and is at the center of the crisis in China’s real estate sector.
Evergrande ‘s suspects
China’s real estate market has been hit by a series of bad loans since the end of 2021. This shook global markets and raised fears that it would have a negative impact on other sectors.
“Public security authorities have recently taken criminal enforcement measures against Du and other crime suspects at Evergrande Financial Wealth Management Co,” police in the city of Shenzhen said in a statement on social media over the weekend. According to Reuters, during protests by disgruntled investors at Evergrande’s headquarters in Shenzhen in 2021, it was revealed that Du Liang was the general manager and legal representative of Evergrande’s wealth management division. But it is not clear whether Du is among those detained, and the police statement did not specify the number of people detained, the charges or the date they were taken into custody, the agency added.
Trading suspended
Trading in Evergrande shares was previously suspended for 17 months until August 28. They fell as much as 25 percent in morning trading today, hitting their lowest level in two weeks.
Last month, the Chinese developer reported a net loss of 33 billion yuan (103.5 billion CZK) for the January-June period, compared with a loss of 66.4 billion yuan in the same period a year earlier. Earlier this month, Evergrande said it had postponed a decision on restructuring its foreign debt from September until next month to give its debt holders more time to consider a restructuring plan.
Source: ČTK
