Title: China Evergrande Shares Suspended as Chairman Placed under Police Surveillance
Date: September 28, 2023
Trading in the shares of China Evergrande (3333.HK) was suspended on Thursday following reports that its chairman, Hui Ka Yan, had been placed under police surveillance. The news has raised concerns about the future of the embattled developer as it grapples with mounting financial challenges and the threat of liquidation.
According to a report by Bloomberg News on Wednesday, Hui, who founded Evergrande in 1996, was taken away by police earlier this month and is currently being monitored at an undisclosed location. The reasons for the surveillance remain unclear, and Reuters has not been able to independently verify the news.
Evergrande, with over $300 billion in liabilities, is facing a severe debt crisis, which has become emblematic of China’s struggling property sector. The company’s debt troubles took a turn for the worse this week after it announced that it was unable to issue new debt due to an investigation into its main unit in China, making its proposed restructuring plan more complicated.
In a concerning development reported by Reuters on Tuesday, a major offshore creditor group of Evergrande revealed its intentions to join a liquidation court petition against the developer if it fails to present a new debt revamp plan by the end of October. The failure of the restructuring plan has raised alarms among analysts, who believe that the risk of liquidation for the company is now significantly higher.
As a result of these developments, trading of Evergrande’s shares in Hong Kong, as well as those of its property services (6666.HK) and electric vehicle (0708.HK) units, was suspended on Thursday. This comes after the company’s shares had recently resumed trading in late August, following a 17-month suspension.
Evergrande’s stock last closed at HK$0.32 before the suspension.
The future of Evergrande remains uncertain as it continues to grapple with its unprecedented debt load. The company’s restructuring plan now appears to be faltering, increasing the likelihood of liquidation. Investors and analysts are closely monitoring the situation, considering the potential impact not only on Evergrande’s stakeholders but also on China’s property sector and the broader economy.
Reporting by Anne Marie Roantree and Donny Kwok; Editing by Kim Coghill & Shri Navaratnam
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Note: This article includes content from various sources and it is based on available information at the time of writing.