HONG KONG: Shares of controversial developer China Evergrande Group fell 25% on Monday after police detained some staff at its asset management unit, signaling a new investigation that could compound the real estate company’s problems. Evergrande, the world’s most indebted real estate developer, is at the center of a crisis in China’s real estate sector, which has seen a series of defaults since late 2021 that have roiled global markets and fueled fears of contagion. Trading in the company’s shares was suspended for 17 months until August 28.
During protests by disgruntled investors at Evergrande’s headquarters in Shenzhen in 2021, Du Liang was identified by staff as the general manager and legal representative of Evergrande’s asset management division.
“Recently, public security organs have taken criminal coercive measures against Du and other suspected criminals Evergrande Financial Wealth Management Co,” police in the southern city of Shenzhen said in a statement on social media on Saturday evening.
Reuters could not confirm that Du was among those arrested, and the police statement did not specify the number of those arrested, the charges or the date they were taken into custody.
Evergrande did not respond to a request for comment on the police actions.
The stock fell as much as 25% to HK$0.465 in early morning trading, the lowest in two weeks. It cut losses by 11% by 0200 GMT, lagging a 0.9% decline in the broader Hang Seng Index.
Last month, the Chinese developer posted a net loss of 33 billion yuan ($4.5 billion) between January and June, compared to a loss of 66.4 billion yuan in the same period last year.
Earlier this month, Evergrande said it had postponed making a decision on its foreign debt restructuring from September to next month to give holders of its debt more time to consider its restructuring plan.
During protests by disgruntled investors at Evergrande’s headquarters in Shenzhen in 2021, Du Liang was identified by staff as the general manager and legal representative of Evergrande’s asset management division.
“Recently, public security organs have taken criminal coercive measures against Du and other suspected criminals Evergrande Financial Wealth Management Co,” police in the southern city of Shenzhen said in a statement on social media on Saturday evening.
Reuters could not confirm that Du was among those arrested, and the police statement did not specify the number of those arrested, the charges or the date they were taken into custody.
Evergrande did not respond to a request for comment on the police actions.
The stock fell as much as 25% to HK$0.465 in early morning trading, the lowest in two weeks. It cut losses by 11% by 0200 GMT, lagging a 0.9% decline in the broader Hang Seng Index.
Last month, the Chinese developer posted a net loss of 33 billion yuan ($4.5 billion) between January and June, compared to a loss of 66.4 billion yuan in the same period last year.
Earlier this month, Evergrande said it had postponed making a decision on its foreign debt restructuring from September to next month to give holders of its debt more time to consider its restructuring plan.
