The company logo is seen at the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China, 26 September 2021. Portal/Aly Song/File Photo Acquire License Rights
HONG KONG, Sept 18 (Portal) – Shares of embattled developer China Evergrande Group (3333.HK) plunged 25% on Monday after police arrested some employees of its asset management unit, suggesting a new investigation into the problems of the real estate company could worsen.
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 rattled global markets and raised fears of contagion. Trading in the company’s shares was suspended for 17 months until August 28.
During protests by angry investors at Evergrande’s headquarters in Shenzhen in 2021, Du Liang was identified by employees as the general manager and legal representative of Evergrande’s asset management department.
“Recently, public security organs took criminal enforcement measures against Du and other suspected criminals at Evergrande Financial Wealth Management Co.,” police in the southern city of Shenzhen said in a social media statement on Saturday evening.
Portal could not confirm that Du was among those arrested, and the police statement did not specify the number of those arrested, their charges or the date of their detention.
Evergrande did not respond to a request for comment on the police operation.
The shares fell as much as 25% to HK$0.465 in early morning trade, their lowest level in two weeks. It pared losses at 0200 GMT, down 11%, lagging a 0.9% decline in the broader Hang Seng Index (.HSI).
Last month, the Chinese developer posted a net loss of 33 billion yuan ($4.5 billion) from January to June, compared with a loss of 66.4 billion yuan in the same period last year.
Earlier this month, Evergrande said it had postponed its offshore debt restructuring decision from September to next month to give holders of its debt more time to consider the restructuring plan.
($1 = 7.2799 Chinese Yuan Renminbi)
Reporting by Donny Kwok, editing by Anne Marie Roantree, Muralikumar Anantharaman and Lincoln Feast.
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