• Thursday, September 28, 2023
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China Evergrande shares tumble 25% after wealth management staff detained

china evergrande (1)

China Evergrande Group’s shares plummeted by 25 percent as police detained individuals from its wealth management unit, raising concerns about a new investigation amid the company’s ongoing financial crisis.

Evergrande, the world’s most indebted property developer, has struggled since late 2021, causing a series of defaults that shook global markets and sparked fears that they could spread.

The recent police action targeted individuals at Evergrande Financial Wealth Management Co., including Du Liang, according to reports. Evergrande’s stock hit a two-week low, falling 25 percent to HK$0.465 before recovering slightly.

“Recently, public security organs took criminal compulsory 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 night. This is according to Reuters.

Read also:China’s Evergrande seeks bankruptcy protection from US court

Reuters said that it could not confirm that Du was among those detained, and the police statement did not specify the number of people detained, the charges, or the date they were taken into custody.

The global news agency also added that Evergrande had yet to respond to its request for comment on the police action.

In the previous month, the Chinese developer reported a net loss of 33 billion yuan ($4.5 billion) for the January-June period, marking an improvement from the 66.4 billion yuan loss in the same period the prior year.

Earlier this month, Evergrande announced a postponement in its decision-making regarding offshore debt restructuring, shifting it from September to the coming month. This delay aims to provide debt holders with additional time to evaluate the proposed restructuring plan.