An Evergrande sign is seen near residential buildings at an Evergrande residential complex in Beijing, China, September 27, 2023. Portal/Florence Lo acquires license rights
HONG KONG, Sept 28 (Portal) – Trading in China Evergrande (3333.HK) shares was suspended on Thursday after reports that its chief executive was placed under police surveillance, increasing concerns about the developer’s future as he has to contend with a growing threat of liquidation.
On Wednesday, Bloomberg News reported that Hui Ka Yan, who founded Evergrande in 1996, was taken away by police this month and placed under surveillance at a specific location
The report said it was not clear why Hui was being monitored. Portal could not immediately verify the message.
With more than $300 billion in liabilities – about the same as Finland’s gross domestic product – Evergrande has become the poster child of a debt crisis in China’s real estate sector, which accounts for about a quarter of the economy.
The company’s debt problems worsened rapidly this week after the company said it was unable to take on new debt due to an investigation into its main Chinese subsidiary, further complicating a proposed restructuring plan.
Portal reported on Tuesday that a major offshore group of Evergrande’s creditors planned to join a bankruptcy lawsuit against the developer if it does not submit a new debt restructuring plan by the end of October.
The company’s restructuring plan is now likely to falter and the risks of the company going into liquidation are rising, some analysts say.
Trading in its Hong Kong-listed shares and the shares of its property services (6666.HK) and electric vehicles (0708.HK) stocks were suspended on Thursday.
Evergrande shares resumed trading at the end of August after a 17-month suspension.
Evergrande shares last closed at HK$0.32.
Reporting by Anne Marie Roantree and Donny Kwok; Edited by Kim Coghill and Shri Navaratnam
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