China Evergrande shares fall 25% after wealth administration workers are detained

China Evergrande shares fall 25% after wealth management employees are detained

HONG KONG (Reuters) – Shares of Chinese language developer China Evergrande Group fell 25% on Monday after police detained some workers at its wealth administration unit, signaling a brand new investigation that might add to the actual property firm’s woes.

Evergrande, the world’s most indebted actual property developer, is on the coronary heart of a disaster in China’s actual property sector, which has seen a collection of defaults since late 2021, shaking world markets and elevating fears of contagion. Buying and selling within the firm’s shares was suspended for 17 months till August 28.

Throughout protests by disgruntled traders at Evergrande’s headquarters in Shenzhen in 2021, Du Liang was recognized by workers as the final supervisor and authorized consultant of Evergrande’s wealth administration division.

“Lately, public safety organs took necessary felony measures in opposition to Du and different suspected criminals in Evergrande Monetary Wealth Administration Co,” police within the southern metropolis of Shenzhen mentioned in an announcement on social media on Saturday night.

Reuters was unable to substantiate that Doe was amongst these arrested, and the police assertion didn’t specify the variety of detainees, the fees, or the date of their detention.

Evergrande didn’t reply to a request for touch upon the police actions.

The inventory fell as a lot as 25% to HK$0.465 in early morning buying and selling, its lowest degree in two weeks. It trimmed its losses by 0200 GMT, falling 11%, lagging the broader Hold Seng Index’s 0.9% decline.

Final month, the Chinese language developer recorded a internet lack of 33 billion yuan ($4.5 billion) from January to June, in comparison with a lack of 66.4 billion yuan in the identical interval of the earlier 12 months.

Earlier this month, Evergrande mentioned it postponed a choice on its exterior debt restructuring from September to subsequent month to permit its debt holders extra time to think about the restructuring plan.

($1 = 7.2799 Chinese language yuan)

(Reporting by Donnie Cook dinner; Modifying by Anne-Marie Rountree, Muralikumar Anantharaman and Lincoln Feast.)

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