China Evergrande shares tumble 25% after wealth management staff detained

HONG KONG, Sept 18 (Reuters) – Shares of embattled developer China Evergrande Group (3333.HK) plunged 25% on Monday after police detained some employees at its wealth administration unit, suggesting a brand new investigation that would add to the property firm’s woes.

Evergrande, the world’s most indebted property developer, is on the centre of a disaster in China’s actual property sector that has seen a string of defaults since late 2021 which have rattled world markets and sparked fears of contagion. Buying and selling within the firm’s inventory was suspended for 17 months till Aug. 28.

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

“Not too long ago, public safety organs took legal obligatory measures in opposition to Du and different suspected criminals at Evergrande Monetary Wealth Administration Co,” police within the southern metropolis of Shenzhen stated in a social media assertion on Saturday night time.

Reuters couldn’t verify that Du was amongst these detained, and the police assertion didn’t specify the variety of folks detained, the fees or the date they had been taken into custody.

Evergrande has not responded to request for touch upon the police motion.

The inventory fell as a lot as 25% to HK$0.465 in early morning commerce, the bottom in two weeks. It pared losses by 0200 GMT, down 11%, lagging a 0.9% fall within the broader Cling Seng Index (.HSI).

Final month, the Chinese language developer posted a January-June web lack of 33 billion yuan ($4.5 billion), versus a 66.4 billion yuan loss in the identical interval the earlier 12 months.

Earlier this month, Evergrande stated it had delayed making a call on offshore debt restructuring from September to subsequent month to permit holders of its debt extra time to contemplate its restructuring plan.

($1 = 7.2799 Chinese language yuan renminbi)

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